Checklist for appointment of Independent Director

Checklist for appointment of Independent Director

If the answer to any of the below given questions is in affirmative then such person cannot be appointed as an Independent Director

1.         Is he a managing director or a whole-time director or a nominee director of the company?

2.         Is he the promoter of the company or its holding, subsidiary or associate?

3.         Is he related with the promoters or directors of the company or its holding, subsidiary or associate?

4.       Does he have any pecuniary relationship with the company, its holding, subsidiary or associate, or their promoters or directors during the current financial year?

5.       Did he have any pecuniary relationship with the company, its holding, subsidiary or associate, or their promoters or directors during two immediately preceding financial year?

6.       Whether his relatives has or had any pecuniary relationship or transaction with the company, its holding, subsidiary or associate, or their promoters or directors, amounting to 2 percent or more of its gross turnover or total income or 50 lakhs or such higher amount as may be prescribed, whichever is lower, during two immediately preceding financial year or during current financial year?

7.    Whether he holds the position of key managerial person in the company, it’s holding, subsidiary or associate?

8.      Whether he has held the position of key managerial person in the company, its holding, subsidiary or associate in any of three financial years immediately preceding the financial year in which he is proposed to be appointed?

9.         Whether he is an employee of the company, it’s holding, subsidiary or associate?

10.    Whether he has ever been an employee of the company, its holding, subsidiary or associate in any of three financial years immediately preceding the financial year in which he is proposed to be appointed?

11.     Whether he is an employee or proprietor or partner of:

   ·      A firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company?

  ·      Any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent or more of the gross turnover of such firm?

12.    In point no. 8, 9, 10, 11, 12 instead of the person proposed to be appointed as an Independent Director, whether any of his relative satisfies those conditions?

13.   Whether such person together with his relatives holds two percent or more of the voting power of the company?

14.      Whether he or his relative is a Chief Executive or director, by whatever name called, of any nonprofit organization that receives 25 percent or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company?

15.      Whether he or his relative is a Chief Executive or director, by whatever name called, of any nonprofit organization that holds 2 percent or more of the total voting power of the company?

  

Qualification of Independent Director

He should also have appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operation or other discipline related to company’s business?