Read the passage given below and answer the questions that follow:

The Securities and Exchange Board of India (SEBI) constituted a Committee to promote and raise standards of good corporate governance under the Chairmanship of Shri Kumar Mangalam Birla, a member of the SEBI Board. The main objective of the Committee was to review corporate governance from the perspective of investors and shareholders and to formulate a ‘Code’ suitable for the Indian corporate environment.

Its essential recommendations apply to listed companies with paid-up share capital of Rs. 3 crore and above. The composition of the Board of Directors should have an optimum combination of executive and non-executive directors. The Audit Committee should have 3 independent directors and one expert with finance and accounting knowledge. The Board should meet at least four times a year with a gap of 4 months between two meetings to review operational plans, capital budgets, quarterly results, minutes of committee meetings. A director cannot be a member of more than 10 committees and cannot be the chairman of more than 5 of the companies.

The non-mandatory recommendations were to apply to all listed private and public sector companies, their directors, management, employees and professionals associated with such companies. The Committee believes that the recommended companies should work towards restructuring the existing boards. It also recognizes that such companies would find it difficult to comply with these conditions immediately.