Summary: In this article, we analyse recent guidance and enforcement actions by SEBI, which provide valuable insights into the approach of the regulator in interpreting the statutory framework on independent directors while applying it in practice.Continue Reading SEBI’s Take on Independent Directors: On Paper or in Fact?
An “independent director” (“ID”) is defined as “an independent director referred to in sub-section (6) of section 149”,[1] where Section 149(6) of the Companies Act, 2013 (“Act”), clarifies that an ID is “a director other than a managing director or a whole-time director or a nominee director” of the company. To be appointed as an ID, a person must fulfil an elaborate set of objective and subjective criteria separated across equity unlisted and listed companies. Continue Reading Sufficiency of extant law to address governance concerns in relation to “independence” of an independent director in relation to subsequent directorships with the company
All companies incorporated in India are mandated to constitute a board of directors,[1] to which companies appoint different kinds and classes of directors – managing director (“MD”), independent director (“ID”), non-executive and non-independent director (“NED”), whole time director (“WTD”) or executive director (“ED”). Given the pivotal role that a company’s directors play in the governance and operations of companies, the Companies Act, 2013 (“Act”), regulates different facets of a directorship from the appointment, duties, and responsibilities to the remuneration. This blog discusses the contours of remuneration limits to evaluate the length and breadth of permissible director remuneration. “Remuneration” has been defined as “any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961[2]”.[3]Continue Reading Evaluating the Contours of Permissible Remuneration for directors of a company in India