Five years on, Sec 151 on small-shareholder directors makes little headway

Efforts have been few and far between since 2014, when the section was introduced; combo of entrenched promoters and onerous curbs may have stifled a provision meant to empower such shareholders

Minority shareholders gained a provision to band together for a board seat five years ago. But its success has been limited.

A combination of entrenched promoters and onerous restrictions may have dulled the use of a provision intended to empower such shareholders, according to experts.  

“A listed company, may upon notice of not less than one thousand small shareholders or one-tenth of the total number of such shareholders, whichever is lower, have a small shareholders’ director elected by the small shareholders,” according to the terms of section 151 of the Companies Act, 2013.

The provision was notified, effective from