It is heartening to know that, SEBI is considering a proposal to limit the number of company boards that an independent director can sit on. The proposal aims to ensure that independent directors get enough time to analyze the agenda of the board meetings and make meaningful contributions during board meetings. In order to give enough attention to all business details, independent directors do need a considerable amount of time.
Voluntary guidelines issued by the Ministry of Corporate Affairs say that an independent director should not serve on the boards of more than seven listed companies. However, SEBI should consider including unlisted, holding, foreign and others companies as well in this number so as to increase effective engagement of IDs on the Boards.
Furthermore, in case, a law or consulting firm does advisory job for a company, having a partner from there as independent director on the Board of said company, which is not desirable, as it could lead to “conflict of interest”.
Read the full news article on Economic Times Click Here : http://economictimes.indiatimes.com/markets/indices--regulation/SEBI-proposal-Independent-directors-face-board-cap/articleshow/6424040.cms
Read our views on the subject on earlier post @ INDIAN CORPORATE LAW -Click Here: https://www.blogger.com/comment.g?blogID=3202774368551476669&postID=2210680351521557977
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