SEBI has proposed to make it mandatory for top 1,000 listed entities to set up a risk management committee. Currently, the top 500 listed entities, in terms of market capitalisation, are required to set up such a committee.
“Considering the multitude of risks faced by listed entities, risk management has emerged as a very important function of the board. The Covid-19 pandemic has also reinforced the need for a robust risk management framework,” SEBI said in a consultation paper issued. The role and responsibility of the risk management committee may include formulating a detailed policy which shall include a framework for identification of internal and external risks faced by the listed entity.