Non-executive director

Dear Mr. Indispensable,

Unlike a Practising Company Secretary, there is no provision under Companies Act or any other Act for a Whole-Time Company Secretary with regard to appoiniting him as a director of any other company. 

 

For a PCS there is a notification from ICSI. But for a Whole Time Company Secretary, who is in employment, there is no such one, and as such he may be appointed as a Non Executive Director of any other company. 

ICSI Notification for PCS : 

The Council had  at the 156^th meeting held on 19^th – 20^th March, 2005, in exercise of its powers under regulation 168 of the Company Secretaries Regulations, 1982 accorded general permission to  members in practice to become non-executive director/promoter/promoter director/subscriber to the Memorandum  and Articles of Association of a company  the objects of which include areas which fall within the scope of the profession of Company Secretaries irrespective of whether or not the practising member holds substantial interest in that company. 

The Council had also allowed members in practice to become non-executive directors/promoter/promoter director/subscriber to the Memorandum and Articles of Association of a company which is engaged in any other business  or occupation provided that the practising member does not hold substantial interest in the company.

The term non-executive director was defined to mean an ordinary director who is required to attend the meetings of the board or its committees only, not paid any remuneration except the sitting fees for attending the board/committee meetings and any remuneration to which he is entitled as ordinary director, and devoting his time for the company only to attend meetings of the board or committee thereof and not for any other purpose.

Regards,

Veeral Gandhi

As such the Company Secretary in full time employemnt is in the full time employment of the Company he can be the Executive Director but not the non executive Director.

Dear Ankurji,

I humbly request you to justify your answer by quoting any legal provision or notification.

Regards,

Veeral Gandhi