
SEC Issues A Ban On Role Shifting From Independent To Executive Directors
The Securities and Exchange Commission (SEC) has issued a directive prohibiting Independent Directors of public companies from taking executive roles within the same entity or its group.
The SEC said this move is to preserve board independence and maintain objectivity in Corporate Governance. It also introduced a three-year cooling-off period before a former CEO can be appointed as Chairman of the same company. The tenure of Directors is now capped at 10 consecutive years in one company and 12 years across a group. A former CEO or Executive Director can only serve as Chairman for a maximum of four years after the cooling-off period. These rules apply to all public companies and capital market operators with immediate effect.