MCA Clarifies On Independent Directors
Published on Tue, Jun 10,2014 | 17:30, Updated at Tue, Jun 10 at 17:48Source : Moneycontrol.com
In this circular the MCA has clarified some issues regarding qualification and appointment of Independent Directors. If a company decides to continue with an Independent Director after the new law was notified, the Director has to be reappointed under the new law, within one year. An Independent Director can be appointed for a term of less than 5 years but it will be counted as a full term towards tenure restrictions.
An Independent Director can serve a maximum 2 terms, even if they total less than 10 years. The MCA has also clarified ‘pecuniary transaction’ in the context of Independent Director qualification. What it seems to imply is that an Independent Director appointed on a board of a company, can also serve as Independent Director on the board of the company’s holding, subsidiary or associate company.
For more please read the circular…