Can Employee be appointed as a non executive director

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Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2011 Hi friends

Wanted to know can the employee become the non executive directors.

udit sharma

udit sharma (Expert)
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16 February 2011 Yes he can....

ADITI BIDASARIA

ADITI BIDASARIA (Expert)
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17 February 2011 Non executive Director (NED ) means a director who is neither in the full employment of the Company nor a managing director of the Company. So in my opinion an employee, who is in full employment of the Company, cannot become a NED of the Company.

udit sharma

udit sharma (Expert)
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18 February 2011 Dear Aditi,

Agreed a NED is one who is neither a MD or a WTD. But in my opinion, if an employee of the Company is appointed as NED that means he will not be devoting his entire time and energy in dicharging his duties as a Director of the Company and would be envable to devote only few of his hours in discharging his functions as a Director. As a Director he will not be in full time employment of the Company and will be a part time director only.

Further, in my opinion, after his appointment as a Director of the Company,if he receives any remuneration as NED of the Company, he will be deemed to be holding an office or place of profit in the Company and the provisions of section 314 will have to be complied with accordingly.

God Bless

CS Udit Sharma

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