Meetings of committee of board

Originally posted by : Ankur Garg
	All the members of a committee "of board" should be members of board of directors (Form 32 wala).

Pls appreciate as in the case of SELECTION COMMITTEE, even person other than board of directors can be appointed as outside expert. Hence My view was a person who is not a member of the Board can be appointed as a committee member in addition to the minimum no of directors required under relevant provision of statute.

Dear Ankur Sir 

Please advise on the above matter

Dear Members,

Truly the composition of selection committee wasn’t on my tips. However here is the same:

EXPLANATION - For the purposes of sub-rule (7) of rule 4, the expression "Selection Committee" means a committee, the majority of which shall consist of independent directors and an expert in the respective field from outside the company.

Thanks for put it as point of discussion. Ab yaad rahega….

Further as per my overall understanding --- This kind of specific rule based explanation should not be used to form a conclusive opinion like --- a person who is not a member of the Board can be appointed as a committee member in addition to the minimum no of directors required under relevant provision of statute.

So I would stick to my opinion based on the reason above that all the members of a committee "of board" should be members of board of directors (Form 32 wala) with one exception based on Director's relatives(office or place of profit) rules 2003 as pointed out by you.

Regards

Sir,

Thank you for your response on the matter.

Can you please elucidate as to what "Form 32 wala" actually mean ?? & are there any provisions in relation to the Constitution or Composition of the Committee of Board ? As the Company law uses the words "as the Board may determine"

The Book named " Company Law Ready Reckoner"    by Dr. D.K. Jain contains in its chapter No. 3 Committee and Class Meetings that " The Board of Directors apoints the members of a committee. It may contitute with the members of the Board of Directors or from the outsiders as the Board may consider appropriate."

"all the members of a committee "of board" should be members of board of directors" CAN YOU PLEASE SUPPORT THIS BY GIVING ANY PROVISIONS OF THE LAW

Dear Sruti,

Form 32 director means a proper member of board of director whose form 32 is files with ROC.

This is the text given in " Company Law Ready Reckoner"    by Dr. D.K. Jain:

As per the above highlighted portion the view of Neha Ji is fine.

Kindly appreciate the above book is itself confusing us. One side it is mentioned that a committee is a mini-version of a Board and other side it is mentioned that committee member may be from the outsiders as the Board may consider appropriate. Therefore to avoid this kind of confusing reference book based understanding I prefer to understand the intention and soul of introducing of a particular law.

In the recent past I have observed totally different compliance environment in the companies following True corporate governance provisions. One cannot put his/her general understanding in front of Management based on reference book.  

Further there are two options to be discussed regarding committee composition:

1. According to me a committee means a mini-board whose members appointed by the board from amongst themselves (supported by various provisions with one exception) and powers delegated to the Committee accordingly. Committee is formed to perform the task which is to be performed and within the ambit of board of directors. But considering the variety and quantity of work the concept of committee introduced. So it is not advisable to disturb the basic structure of forming committee by putting an outsider. Somewhere it may also disturb the legality of committee.
2. Based on the exception given in office or place of profit rules 2003, we may put a person who is not a member of the Board can be appointed as a committee member in addition to the minimum no of directors required under relevant provision of statute. Further one more thing I would like to add exception given in office or place of profit rules 2003 is not a very strong one as rules are also in favour of the appointment of independent directors in selection committee first along with one outsider [expert in the respective field].

I think both the above options are fine. But I am following the first one being more reliable, commonly accepted with zero risk.  

Regards

Ankur Sir

Thanks a ton for your opinion and advice.