Demand for risk managers soars as Sebi eyes broader RMC requirement

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Subscribe to enjoy similar stories. Mumbai: To boost corporate governance practices, the capital market regulator plans to extend the mandate of setting up risk management committees (RMC), to the top 2,000 companies listed on exchanges as per their market share. This comes after the Securities and Exchange Board of India (Sebi) in 2020 mandated that the top 1,000 listed companies set up RMCs.

If this decision goes through, there will be fierce demand for risk managers in India Inc. Mint spoke to consultancy and compliance experts who told them that companies are upping their teams of RMCs which include auditors, cybersecurity and geopolitical experts. To be clear, RMCs are responsible for pre-empting, evaluating and mitigating risks that might affect the organization.

This is different from a crisis management team which springs into action after the crisis happens. Also read | RBI deputy governor urges banks to exercise prudent risk management On 26 June, Sebi released a consultation paper seeking comments on recommendations given by an expert committee constituted in August 2023 and chaired by former Sebi Whole Time Member S.K. Mohanty on ease of doing business.

The recommendations included amendments to Sebi's Listing Obligations and Disclosure Requirements (LODR) regulations, aimed at strengthening corporate governance. One key proposal is extending the discretionary requirement to form RMCs to the top 2,000 listed entities. Experts believe this move will provide companies with a valuable "outside-in" perspective, but they also view it as part of a broader regulatory shift where authorities are delving deeper into corporate operations and governance.