Independent Director

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Dear All,

 

Can u plz help me out in this...

Suppose X (Professional)holds membership in board of directors of a 
listed company as an independent director. He is rendering 
professional services to the company and charging professional 
services... Will this effect his independence to the board... (Both 
Listing and Companies Act) point of view.

If not affecting his independence, what are limits for managerial 
remuneration... Whether these limits also applies to professional fees 
charged for professional services rendered.
 

With Regards

Shweta Maheshwari

 

Replies (4)

YOU CAN REFER SECTION 314 OF COMPANIES ACT.

 

Clause 49 of the listing agreement specifies that a person to be an independent director -     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;
 
Since the director is rendering professional services to the company  having pecuniary relationship, for which he will be receiving professional charges, can not be treated as an independent director.
 

I am 100% agree with V.Radhakrishna .Professional fees paid to such independent non executive/executive  directors  outside the purview of  managerial remuneration , if the director rendering such services possess requisite qualification required to perform such services .

01) Is part time practice allowed for CAs? If so what is the procedure? 02) Is there any forum, wherein you enroll yourself for appointment as Indepedent Director in companies who are willing to appoint persons with industry and business process experience on the Board

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