{"id":4785,"date":"2017-10-27T16:00:39","date_gmt":"2017-10-27T10:30:39","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=4785"},"modified":"2020-12-04T14:06:22","modified_gmt":"2020-12-04T08:36:22","slug":"independent-director-company","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/independent-director-company\/","title":{"rendered":"What do We Mean by The Term \u201cIndependent Director Company\u201d?"},"content":{"rendered":"<p class=\"has-drop-cap\">According to <strong>NASDAQ<\/strong><sup><a href=\"https:\/\/www.nasdaq.com\/\">[1]<\/a><\/sup>&ndash; An independent director is a person other than the employee or officer of the company or any individual who is having a relationship which is in the opinion of the board of directors deemed to interfere with the independent judgment while carrying out the roles as well as responsibilities of a director in the company.<\/p>\n\n\n\n<p>A person who has not any particular relationship associated with the company. And even relatives or family members should not have a peculiar relationship or transaction with the company. With the help o,f the points mentioned below, we are going to discuss the functions, roles, duties, and qualities of a company director.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The legal requirement for an Independent Director:<\/h2>\n\n\n\n<p>All public limited company is mandatory to have at least one of the third director as a director. If the company has not been listed on any stock exchange, then it should have at least two directors, but only if the company meets the following conditions:<\/p>\n\n\n\n<ul><li>When the paid-up (share) capital crosses of Rs. Ten Crores.<\/li><li>When the turn over crosses INR 100 Crores.<\/li><li>When the outstanding deposits and loan cross INR 50 Crores.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Independent Director roles and Responsibilities:<\/h2>\n\n\n\n<p>The main role is to protect the interest of minority stakeholders. The independent director&rsquo;s role is to analyze the performance of the management and make prudent and unbiased judgments.<\/p>\n\n\n\n<p>A person who is a whole-time director in a listed company, not serving as an independent director more than three <strong>listed company<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How are Independent Directors Appointed?<\/h2>\n\n\n\n<p>One-third of directors of the public limited company should be appointed as an <a href=\"https:\/\/enterslice.com\/learning\/appointment-directors-companies-act-2013\/\"><strong>independent director<\/strong><\/a>. The securities and SEBI also require same directors, where the chairman is a non-executive director. If a company does not have non-executive. the director should mediate the situation like the conflict between management and stakeholder&rsquo;s interest.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Independent Director Tenure and Remuneration:<\/h2>\n\n\n\n<p>The maximum tenure will be five years. It can extend up to ten years depending upon the special resolution by the company.<\/p>\n\n\n\n<p>Sitting fee will be INR 1 lakhs. The independent director will get a profit commission if it is approved by the company stakeholders.<\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/applicability-independent-director-company\/\">Applicability of Independent Director in a Company<\/a><\/mark>.<\/p><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">The qualities of an Independent director:<\/h2>\n\n\n\n<p>the director should have experience and expertise in financial, law, marketing and other experience related to the business. Independent directors should possess loyalty, decision making, and impartiality qualities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Databank of Independent Director Contains:<\/h2>\n\n\n\n<p>The company appointment and qualification is authorized by the central government to set up and maintain the independent director data bank<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Independent Director of Data Bank Contains the Following Information:<\/h2>\n\n\n\n<p>Fathers name, Date of birth, name and surname, gender, <a href=\"http:\/\/www.mca.gov.in\/MinistryV2\/dinprocess.html\">DIN<\/a>, Nationality, Occupation, Address, Pin code, Phone number, Experience if any, Education qualification.<\/p>\n\n\n\n<p>Listed below is the information about the director when he is the partner of Limited Liability Company<\/p>\n\n\n\n<p>Name of the Limited liability Company, Nature of the industry, duration of the appointment.<\/p>\n\n\n\n<p>Listed below is the information about the director when he is the director of another company<\/p>\n\n\n\n<p>Company name, Nature of the industry, duration of the appointment, specify which type of director he is.<\/p>\n\n\n\n<div class=\"read\"><p><b>Read More:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/types-of-board-of-directors-as-per-the-companies-act-2013\/\">Types of Board of Directors As Per The Companies Act 2013<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>According to NASDAQ[1]&ndash; An independent director is a person other than the employee or officer of the company or any individual who is having a relationship which is in the opinion of the board of directors deemed to interfere with the independent judgment while carrying out the roles as well as responsibilities of a director [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":4788,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[366,895],"acf":{"service_id":"1"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Do We Mean By The Term An Independent Director Company?<\/title>\n<meta name=\"description\" content=\"An Independent director cannot be a whole time director or managing director. The company cannot accept relatives or family members as an independent director.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/independent-director-company\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Do We Mean By The Term An Independent Director Company?\" \/>\n<meta property=\"og:description\" content=\"An Independent director cannot be a whole time director or managing director. The company cannot accept relatives or family members as an independent director.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/independent-director-company\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2017-10-27T10:30:39+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-12-04T08:36:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2017\/10\/hands-people-woman-working-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"853\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Narendra Kumar","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/nk-1.jpg","authorDescription":"Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.","postViews":519,"readingTime":2,"nextPost":{"id":4782,"slug":"moa-fast-track-company-registration-system"},"prevPost":{"id":4796,"slug":"annual-compliance-checklist-startups"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2017\/10\/hands-people-woman-working-1.jpg","postTerms":"Startup","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/4785"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=4785"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/4785\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/4788"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=4785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=4785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=4785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}