Manner of selection of independent directors and maintenance of data bank of independent
📚 Law Minded summary
Independent directors can be picked from a data bank maintained by an approved institute, holding the names and qualifications of eligible people.
The company remains responsible for checking that the person it appoints is suitable, and the appointment is approved by the members at a general meeting.
(1) Subject to the provision s contained in sub -section (6) of section 149, an independent director may be selected from a data bank containing names, addresses and qualifications of persons who are eligible and willing to act as independent directors, maintained by any body, ins titute or association, as may be notified by the Central Government, having expertise in creation and maintenance of such data bank and put on their website for the use by the company making the appointment of such directors: Provided that responsibility of exercising due diligence before selecting a person from the data bank referred to above, as an independent director shall lie with the company making such appointment.
(2) The appointment of independent director shall be approved by the company in general mee ting as provided in sub-section (2) of section 152 and the explanatory statement annexed to the notice of the general meeting called to consider the said appointment shall indicate the justification for choosing the appointee for appointment as independent director.
(3) The data bank referred to in sub -section (1), shall create and maintain data of persons willing to act as independent director in accordance with such rules as may be prescribed.
(4) The Central Government may prescribe the manner and procedure of selection of independent directors who fulfil the qualifications and requirements specified under section 149.
All sections in Chapter XI — Appointment and Qualifications of Directors