Affluence Advisory
Quick Summary
Introduction Independent Directors (IDs) occupy a unique position in the corporate governance framework. They act as guardians of minority shareholder interests, provide unbiased oversight to management, and contribute to balanced decision-making at the board level. Recognising the significance of
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
The primary purpose of Regulation 25 is to strengthen board independence, ensure effective oversight of management, protect minority shareholders, enhance transparency and accountability, and promote robust corporate governance practices in listed entities.
No, Regulation 25(1) explicitly prohibits the appointment or continuation of any alternate director for an Independent Director, as independence is personal and cannot be delegated.
Under the Companies Act, 2013, an Independent Director can generally serve for a maximum of 10 years (two consecutive terms of 5 years each), after which a three-year cooling-off period is required before reappointment.
The appointment, re-appointment, and removal of an Independent Director require approval from shareholders through a Special Resolution, which needs at least 75% of the votes in favour.
If an Independent Director was appointed using the 'dual approval' mechanism (where votes in favour exceeded votes against, and public shareholder votes in favour exceeded public shareholder votes against), their removal also requires that votes in favour of removal exceed votes against, and public shareholder votes in favour of removal exceed public shareholder votes against.
An Independent Director is liable only if an act occurred with their knowledge, they consented or connived with it, or they failed to exercise reasonable care and diligence expected from a prudent director.
CAclubindia
