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Independent directors circumvent board cap

Independent directors on company boards get themselves redesignated after the AGM to get around the limit on such positions

N Sundaresha Subramanian  |  New Delhi 

Some independent directors (ID) have been altering their status as ‘non-independent non-executive directors’ in some boards, to help get appointed in a new company as ID. This helps them get around the cap on IDs, while continuing to keep their board seats.

The Companies Act of 2013 permits a maximum of directorships in public limited companies, listed or unlisted. And, the listing agreement specified by the Securities and Exchange Board of India, in effect from October 1, 2014, has limited the maximum number of IDs in listed companies to seven. The cap was to ensure ...

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First Published: Sun, July 17 2016. 20:28 IST
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