It is essential that an independent director continues to remain ‘independent’ and hence remuneration is inconsistent with independence, barring certain conditions.
An
independent director shall not receive
any stock option or remuneration except for attending meetings, reimbursement of expenses for participation
in the meetings and may receive profits subject to the approval of
shareholders.
The sitting fee for independent directors shall not be less
than the sitting fee payable to other directors. This was to ensure that there
is no financial nexus between independent directors and the company. Equating
the fee of independent directors and other directors will ensure that they do
not feel they are at a disadvantage.
◈ What are the liabilities of
independent director ?
Independent directors shall be held liable only for acts or
omissions by a company which occurred with their knowledge, with their consent
or connivance or where they did not act diligently. This will ensure that the
independent directors can work honestly, and take decision without the fear of
being trapped in a false case.
◈ Removal
and resignation of independent director
An
independent director shall be replaced within a period of 180 days from the
date of resignation or removal. The procedure is identical to removal of other
directors- refer to sec 168(Resignation of Directors) and 169(Removal of
directors by the board). If an independent director remains absent from any
board meeting for 12 months period with or without the permission from the
board or violates any of the provisions of section 167, it will be deemed that
the seat of director is vacant.
0 comments:
Post a Comment
Thanks