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  • About us
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    • Editorial Board
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  • Nominee Director Services
  • Independent Directors
  • Journal
    • Editorial Board
    • Guidelines
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    • Volume 1 Issue 1
    • Volume 1 Issue 2
    • Volume 1 Issue 3
    • Volume 1 Issue 4
    • Volume 2 Issue 1
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    • Volume 2 Issue 4
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Independent Director Services

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Frequently Asked Questions

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An independent director is extremely important to a company's success since they improve governance and raise the organization's credibility. An independent director is a non-executive director who helps the firm expand by offering superior expertise and accurate assessments of the Board of Directors' performance.


As per the provisions of the Companies Act, 2013 an independent director means an Independent Director referred under section 149(6) of the act.


Listed Companies

  • Every listed Public Company shall have at least one-third of its total number of directors as independent directors.

Unlisted Companies

  • The Public Companies with a paid-up share capital of Rs. 10 crores or more
  • The Public Companies with a turnover of Rs. 100 crore or more
  • The Public Companies with aggregate outstanding loans, and deposits exceeding Rs. 50 crore.

The Independent Directors are appointed by the Board of Directors after judging their capability, experience, skills, and integrity of such Director. Such appointment is approved by the members in the general meeting.


  • Independent Directors aid in making decisions that are fair and impartial.
  • An effective evaluation of the board of directors' and management's performance is carried out by independent directors.
  • Independent Directors provide guidance for the hiring, compensation, and termination of executive directors and other managerial staff.
  • The interests of minority owners must be preserved, according to independent directors.
  • In situations where there are disagreements between shareholders and management, independent directors serve as an arbiter to preserve the interests of the corporation.
  • Independent Directors make sure the company has a sound risk management strategy in place and that the right steps are made for internal financial control.


The Independent Directors of the Company must have at least one meeting each year without the participation of Non-Independent Directors, as required by the Companies Act, 2013. Such a meeting should be attended by each Independent Director to take into account the following factors:

  • Examine the board of directors' performance.
  • Examine the chairperson's performance while taking into account the opinions of the company's executive and non-executive directors.
  • Analyze the consistency, volume, and timeliness of the information flow inside the business.


  • At any given time, the Independent Directors may serve in no more than seven Listed Companies.
  • As mandated by the laws, an Independent Director must be a part of the Corporate Social Responsibility Committee.
  • The information bank created by the ministry of corporate affairs can be used to appoint an Independent Director.
  • Any Independent Director vacancy must be filled at the following Board Meeting or, if it occurs later, within three months of the vacancy.
  • The board meeting must have at least one Independent Director in attendance, provided that it is called with less notice. The decision must be endorsed by an Independent Director and distributed to all the directors if such a director is not present at the board meeting.

Therefore, Independent Directors are crucial to the organization's efforts to increase decision-making efficiency and openness.


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