I want to know about independent director its new terminology for me . I am having 18+ years in SAP consulting , Can I become independent director ?
I also want to know what are roles and responsibilities of independent director.
Ans: Hello Praveen, thank you for your question. An independent director is a non-executive director of a company who helps the company in improving corporate credibility and governance standards. The role of an independent director is to provide an impartial opinion as they are not part of the company’s existing management. The Companies Act, 2013 has defined the term “Independent Director” along with several new requirements relating to their appointment, duties, role, and responsibilities.
The provisions relating to the appointment of Independent directors are contained in Section 149 of the Companies Act, 2013 should be read along with Rule 4 and Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 1. The Companies Act, 2013 mandates certain companies to have independent directors on their Board of Directors.
As for your question about becoming an independent director, it is possible for you to become one. However, the eligibility criteria for becoming an independent director are defined by the Companies Act, 2013 and the Securities and Exchange Board of India (SEBI). The eligibility criteria include qualifications, experience, and other factors such as age, independence, and expertise.
In terms of roles and responsibilities, independent directors have several duties such as:
Undertaking appropriate induction and regularly updating and refreshing their skills, knowledge, and familiarity with the company.
Attempting to attend the company’s general meetings.
Attempting to attend Board of Director’s meetings and board committees meeting being a member.
Providing independent judgment to the board on matters such as finances, strategy, performance, risk management, and key appointments.
Playing an active role in succession-planning.
Protecting the interests of all stakeholders.
I hope this helps. If you have any more questions, feel free to ask!