Few queries on directors

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Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2013
Can a MD / CEO serve on the board of other companies as well? If yes, is there a limit on the number of companies?

Can a former CEO/MD join on the board of the company?

Is it mandatory for the CEO/MD and Chairman to be different individuals? If yes, as per which section / guidelines?

Thanks

Ajay Mishra

Ajay Mishra (Expert)
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21 February 2013 Hi

In case of Public Limited Company, a MD can be a member of the Board up to 15 public company and n number of private limited company. But MD without approval of CG can be MD of one more company.

In case of CEO, it means he/she is whole time employee of the company and his/her total service is restricted to only that company.
But, Generally the Companies Act, 1956 is silent about the provision of CEO, so you are free to use this post accordingly.

The provisions of the Companies Act, 1956 regarding MD/CEO is not applicable to private limited company.

So you are free to appoint him/her as per management decision.

Ajay Mishra

Ajay Mishra (Expert)
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21 February 2013 Hi

Yes, there is no restriction on appointment of former MD/CEO in Board.

Also, it is not mandatory, that MD and Chairman should be different. However, CEO and MD can be different.

Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2013 Thanks.

Regd part 2 of my query, can the former CEO/MD serve on the board of the company?

Is it mandatory for the CEO/MD and Chairman to be different individuals? IF so, as per which clause/section?

Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2013 thanks for the info

Ajay Mishra

Ajay Mishra (Expert)
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21 February 2013 Hi

MD and CEO should be different, as its name pronounce different liability.

CEO word is not used under the Companies Act, 1956. It is used only in Listing Agreement.

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