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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Governance Influencers

Before a general meeting of Kaveri Pharma Ltd., a SEBI-registered proxy advisor intends to issue a report on its resolutions. Which practice is most consistent with SEBI's framework for proxy advisors?

A SEBI-registered proxy advisor should have a publicly available voting recommendation policy and should disclose and manage conflicts of interest to clients. Concealing conflicts or favouring paying companies breaches the expected standards of transparency and independence.

  1. AIssue the report without any disclosure of its conflicts of interest with the company
  2. BShare the draft with the company only after clients have voted
  3. CMake its voting recommendation policy public and disclose conflicts of interest to its clientsCorrect
  4. DRecommend votes in favour of any company that pays for its advisory services

Explanation

SEBI's regulation of proxy advisors expects a published, transparent voting recommendation policy and disclosure and management of conflicts of interest. The other options show concealment of conflicts or compromised independence.

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