Companies Act, 2017

PART-VII

APPOINTMENT AND REMOVAL OF DIRECTORS

From: 2023-11-01 - To: 0000-00-00 166. Manner of selection of independent directors and maintenance of databank of independent directors- (1) An independent director to be appointed under any law, rules, regulations or code, shall 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 institute, body or association, as may be notified by the Commission, having expertise in creation and maintenance of such data bank and post 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 or the Government, as the case may be, making such appointment. (2) For the purpose of this section, an independent director means a director who is not connected or does not have any other relationship’, whether pecuniary or otherwise, with the company, its associated companies, subsidiaries, holding company or directors; and he can be reasonably perceived as being able to exercise independent business judgment without being subservient to any form of conflict of interest: Provided that without prejudice to the generality of this sub-section no director shall be considered independent if one or more of the following circumstances exist- (a) he has been an employee of the company, any of its subsidiaries or holding company within the last three years; (b) he is or has been the chief executive officer of subsidiaries, associated company, associated undertaking or holding company in the last three years; (c) he has, or has had within the last three years, a material business relationship with the company either directly, or indirectly as a partner, major shareholder or director of a body that has such a relationship with the company. Explanation: The major shareholder means a person who, individually or in concert with his family or as part of a group, holds 10% or more shares having voting rights in the paid-up capital of the company; (d) he has received remuneration in the…