Independent director
This query is : Resolved
14 February 2012
what are the liabilities attached to an independent director of a limited co..
what are the provisions relating to the independent director.
what are the provisions relating to the independent director.
14 February 2012
As per the definition of independent director in the code of Corporate Governance, an independent director should not have any pecuniary relations or transactions with the company or its promoters; his decisions should be independent of those who have controlling stake in a company and be in the overall interest of the company and its stakeholders. The Companies Act does not have a definition of `independent directors’ though the definition of independent director as given in the recently amended clause 49 of listing agreement is an inclusive definition, which says who could be independent directors. Clause 49 of the listing agreements defines independent directors as follows:
”For the purpose of this clause the expression ‘independent directors’ means directors who apart from receiving director’s remuneration, do not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in judgment of the board may affect independence of judgment of the directors.”
There are no provisions for appointment of independent director in the Companies Act. The appointment of independent directors in case of listed companies governed by the SEBI, but in case of unlisted company there is no such requirements.
”For the purpose of this clause the expression ‘independent directors’ means directors who apart from receiving director’s remuneration, do not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in judgment of the board may affect independence of judgment of the directors.”
There are no provisions for appointment of independent director in the Companies Act. The appointment of independent directors in case of listed companies governed by the SEBI, but in case of unlisted company there is no such requirements.
15 February 2012
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