indepandent director

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Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2010 What is the defition of indepandent director or non executive director .

Ankur Garg

Ankur Garg (Expert)

30 August 2010 Hi,

The purpose of identifying and appointing independent directors is to ensure that the board includes directors who can effectively exercise their best judgment for the exclusive benefit of the Company, judgment that is not clouded by real or perceived conflicts of interest.

As per clause 49 of Listing Agreements:

the expression ‘independent director’ shall mean a non-executive director of the company who:
a. apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the director;
b. is not related to promoters or persons occupying management positions at the board level or at one level below the board;
c. has not been an executive of the company in the immediately preceding three financial years;
d. is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following:
i. the statutory audit firm or the internal audit firm that is associated with the company, and
ii. the legal firm(s) and consulting firm(s) that have a material association with the company.
e. is not a material supplier, service provider or customer or a lessor or lessee of the company, which may affect independence of the director;
f. is not a substantial shareholder of the company i.e. owning two percent or more of the block of voting shares.
g. is not less than 21 years of age

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