The Securities and Exchange Board of India (Sebi) has taken several measures for strict adherence to corporate governance in Indian corporate houses. Steps have already been taken regarding promoters' holding, and now it has taken up the issue of independent directors.

The companies that are listed on the Indian stock markets are regulated by the Securities and Exchange Board of India (Sebi); and Sebi monitors their corporate governance compliance through Clause 49. The clause is incorporated in the listing agreement of the stock exchanges and it is mandatory for companies to comply with the norms. Sebi, issued Clause 49 in February 2000. Group A companies were instructed to meet the norms by March 31, 2001, whereas the companies with networth of Rs. 25 cr and a minimum paid-up-capital of Rs. 10 cr had to fulfill the same by March 31, 2002. The rest of the companies listed on the stock exchanges with networth of Rs. 25 cr and a minimum paid-up-capital of Rs. 3 cr were required to comply with the norms by March 31, 2003. Later, Sebi revised the clause and issued a new clause on October 29, 2004. The new clause has been in force for the companies that were listed on the stock exchanges after the new clause was issued. The companies that were already listed on the Indian stock exchanges did not establish the norms set by Sebi, though the deadline was long over.

Sebi has strictly instructed all the companies listed before October 29, 2004 to comply with the corporate governance norms of Clause 49. The final date to meet those instructions was decided as the year-end of 2005. Sebi has already indicated that companies would be de-listed, if they didn't meet the norms, or they would have to pay a hefty fine of up to Rs. 1 cr in case of non-compliance

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