Stakeholders Relationship Committee is a committee that drives a relationship of a company and its stakeholders by resolving their grievances which comprises the complaints registered by them. The law related to the Stakeholders relationship committee is prescribed under section 178(5) of the companies, act, 2013 and Regulation 20 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.
Constitution / Composition of the Stakeholders Committee
| Section 178(5) of the Companies Act 2013
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Regulation – 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, |
| Ø The BOD of a company which comprises of more than 1000 shareholders, debenture holders, deposit holders, and any other security holders at any time during a financial year shall constitute a Committee consisting of a chairperson who shall be a non-executive director and such other members as may be decided by the Board (BOD).
Ø The chairperson of the committee will attend the general meeting of the company and in his absence, he will authorise any other member to attend the general meeting of the company |
(1) The listed company shall constitute this Committee to specially look into several aspects of interest of debenture holders, shareholders, and other security holders.
(2) The chairperson of this committee must be a non-executive director.
(3) Minimum 3 directors shall be members of the Committee, out of which at least one will be an independent director and if a listed entity having outstanding equity shares (of superior voting right) then, at least 2/3rd members of the Stakeholders Relationship Committee shall consist of independent directors.
(4) The Chairperson of the Stakeholders Relationship Committee shall be present at the AGM to answer queries of the security holders.
(5) The committee members shall meet at least once in a year.
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Role of Stakeholders Relationship Committee
The role of the Stakeholders Relationship Committee shall be to examine and resolve the grievances of the shareholders of the listed company including complaints/grievances related to: –
- Transfer of shares,
- Non-receipt of annual report and
- Non-receipt of declared dividends.
SEBI (LODR) Regulations, 2015 provides the role of the Stakeholders Relationship Committee, which is as under:
(1) Resolving the grievances of the shareholders including complaints related to: –
- transfer/transmission of shares,
- non-receipt of annual report,
- non-receipt of declared dividends,
- issue of new/duplicate certificates,
- General meetings etc.
(2) Review the steps taken for the effective exercise of voting rights by shareholders.
(3) Review the service standards adopted by the listed companies in respect of several services being rendered by the Registrar & Share Transfer Agent (RTA).
(4) Review of the several measures and initiatives taken by the listed companies for reducing the volume of unclaimed dividends and ensuring timely receipt of: –
- dividend warrants
- annual reports
- statutory notices
by the shareholders of the company.
Disclosure in Board’s Report and website:
SEBI (LODR), Regulations, 2015:
The following disclosures shall be made on the corporate governance in the annual report:
Stakeholders’ grievance committee:
- Name of non-executive director govern the committee;
- Name and designation of a compliance officer;
- Number of shareholders’ complaints/grievances received so far;
- Number grievance not solved to the satisfaction of shareholders;
- The number of pending complaints.
PUNISHMENT
In case of any contravention of the provisions of section 178, then: –
- The company/entity shall be liable to a penalty of 5 lakh rupees and
- Every officer of the company who is in default shall be liable to a penalty of 1 lakh rupees.
Links:
Section 178 of the Companies Act,2013:
http://ebook.mca.gov.in/Actpagedisplay.aspx?PAGENAME=17562
Regulation 20 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015:
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