In a move to promote good business practices, the SEBI board on Thursday approved new corporate governance norms that restrict the number of independent directors on a company board, spell out whistleblower policies, and institute checks on salaries of key managerial persons, among other things.

“The board has now revised its listing agreement, bringing it in line with the requirement of the provisions of the Companies Act, 2013,” said SEBI Chairman UK Sinha. The new norms will come into effect from October 1.

Under the new rules, an individual can serve as an independent director on a maximum of seven listed companies. The Board also decided that if an individual is a whole-time director in a listed company, he can serve as an independent director in a maximum of three companies. Also, if one has completed five years or more as an independent director, he will be eligible for just one more term of five years.

Managerial remuneration will be decided by a compensation committee headed by an independent director.

The board has also decided that the definition of related-party transactions will be widened.

“There will be voting (by the shareholders) in which the related party cannot vote,” the SEBI chief said.