Code of Conduct explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A document the board writes, everyone signs every year, and the public can read — three obligations in three short sub-regulations.
The requirement
Regulation 17(5) states that the Board of Directors shall lay down a code of conduct for all members of the BOD and senior management of the listed entity, which shall suitably incorporate the duties of independent directors as laid down in the Companies Act, 2013.
Further regulation 26(3) mandates that all the members of the BOD and senior management personnel shall affirm compliance with the code of conduct on an annual basis.
Nonetheless, this code of conduct shall be disseminated under a separate section on the listed entity's website.
Three features together turn what could be a boilerplate document into something with consequences.
It must incorporate statutory duties. The code shall suitably incorporate the duties of independent directors as laid down in the Companies Act, 2013. Those duties are not aspirational; they are the basis on which a director's conduct is judged. Building them into the code means a breach of duty is simultaneously a breach of the code — internally actionable, not only legally.
It must be affirmed annually. Regulation 26(3) requires every director and every senior management person to affirm compliance each year. That converts the code from a document circulated on joining into a yearly personal statement. A director cannot later say they were unaware of it.
It must be public. Publication under a separate section on the listed entity's website means the standard is visible to investors, employees and counterparties — so the affirmation is made against a benchmark anyone can read.
Note the scope, which extends past the board to senior management. A director who suspects a code breach below board level is not raising a matter outside the framework; senior management is squarely inside it.
For an independent director, and particularly a first-time appointee, the code is the most useful single document to obtain before the first meeting. It states in the company's own words what is expected — on conflicts, confidentiality, dealing in securities and attendance — and it is the document their annual affirmation will refer to.
The three obligations
| Regulation | Obligation | On whom |
|---|---|---|
| 17(5) | Lay down a code incorporating independent directors' duties | The Board |
| 26(3) | Affirm compliance on an annual basis | All board members and senior management personnel |
| 17(5) | Disseminate under a separate section on the website | The listed entity |
The underlying statutory duty
Section 166 spells out the basic duties that a director should consider while discharging its responsibilities such as the director should act in accordance with the articles of the company.
Note the direction of travel. The Act sets the duties; the listing regulations require them to be written into a company-specific code; the code is then affirmed and published. Each layer makes the same obligation harder to overlook.
Using the code in practice
- Obtain and read it before the first board meeting.
- Check that it actually reproduces the statutory duties, rather than referring to them.
- Diarise the annual affirmation.
- Confirm it is on the website in a separate section, not buried in a policies page.
- Treat a suspected breach by senior management as within scope.
Common mistakes
- Signing the annual affirmation without re-reading the code of conduct.
- Limiting the code to directors and excluding senior management.
- Cross-referring to the Act instead of incorporating the duties.
- Publishing the code inside a general policies section rather than its own.