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

Meghna Energy Ltd, a top-1000 listed company, wants to know who must oversee its risk management framework at the board level. Under the SEBI Listing Regulations, which committee requirement applies to such a company?

A top-1000 listed company must have a Risk Management Committee constituted by its board under the SEBI Listing Regulations. This committee oversees the risk management framework, including policy and its implementation. The Audit Committee or CSR Committee cannot substitute for it.

  1. AA Risk Management Committee constituted by the boardCorrect
  2. BA Corporate Social Responsibility Committee only
  3. CAn Audit Committee only, with no separate risk body
  4. DA committee of shareholders appointed at the AGM

Explanation

The Listing Regulations require the top 1000 listed entities by market capitalisation to constitute a Risk Management Committee of the board, which oversees the risk framework. The Audit Committee evaluates internal controls and risk systems but does not replace this committee for such companies.

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