The Securities and Exchange Commission (SEC) has released a fresh Guidance Note clarifying its recent Circular on the Transmutation of Independent Non-Executive Directors and Tenure of Directors. This development has far-reaching implications for Capital Market Operators (CMOs) and public companies operating as Significant Public Interest Entities (SPIEs).
With this Guidance Note, the SEC aims to curb the longstanding practice of rotating and cross-appointing directors—particularly the conversion of Independent Non-Executive Directors (INEDs) into Executive Directors (EDs) within the same organisation or group, and the transition of CEOs into Board Chairmen without a proper governance buffer. These practices raise critical concerns about board independence, effective oversight, and investor trust.
Continue reading here.