Services for Non Executive Directors- An Overview
The Indian corporate law landscape comprises of the Companies Act, 2013. Prior to this, the Companies Act, 1956 regulated the provisions related to directors. Section 149 of the Companies Act, 2013 speaks about the appointment of directors in a company. Along with the appointment of directors, there is a requirement of independent directors for public limited companies to carry out their functions. Services of Non Executive Directors would comprise of the requirements for companies to appoint Non Executive Directors.
There is no precise meaning of the term ‘Non Executive Directors’ under the Companies Act, 2013. However, the meaning of an Executive Director is defined under Rule 2(k) of the Companies (Specification of Definition Details) Rules, 2014. An executive director is understood as a ‘whole time director ‘who carries out the responsibilities for the smooth functioning of the company. This would be as per section 2(94) of the Companies Act, 2013.
The meaning of a whole time director would include the term executive director under the purview of the Companies Act, 2013. Hence a non executive director would include any individual who is a director, but does not carry out responsibilities for a company whole time. The appointment of non executive directors is mostly based on the principle related to independence of functions.
Non executive directors have their place in the Nomination and Remuneration Committee (NRC). Majority of the directors of this committee must be non executive directors. Hence as per the requirements of the company, the independence of non executive directors should not be compromised.
Benefits of Services for Non Executive Directors
There are different benefits of services for Non Executive Directors:
When using services for Non Executive directors, the company can rely on independence. Appointing Non Executive Directors for a company requires some form of skills and prudence which can only be provided through professionals. Hence using our services for Non Executive Directors would be beneficial for your company.
- Appointment Terms
Appointing a Non Executive Director is a big task. Hence lot of time would go in the appointment of a Non Executive Director. At Enterslice, we would ensure that the appointment process for a Non Executive Director is smooth and seamless. Such appointment procedures would be streamlined as per the requirement of the company. We will tailor make the appointment as per your requirements.
- Employment Agreement
We have you covered for drafting the terms and conditions in the employment agreement. The employment terms for Non Executive Directors must be in accordance with the requirement of the company. Using our services for Non Executive Directors would reduce your time and expense.
- Proper Checks
We will ensure to carry out criminal background checks and other forms of convictions related to disqualifications and bankruptcy. This is an important step in the appointment process of non executive directors.
Duty under Services for Non Executive Directors
In order to take our services for non executive directors, there are particular requirements and duties which have be followed by non executive directors. The following duties have to be performed in accordance with the requirement of the company:
- Carry out Performance Review
Non Executive Directors would be considered as a part of the board. Hence they would be required to carry out performance review on shareholders of the company. This performance review would access the tasks which are carried out by the management. The actual performance would be measured with the required performance. Apart from carrying out duties related to performance review, Non Executive Directors also have an important role to play in the performance reporting and annual reporting compliance.
- Direct the Company
Non executive directors would also be the pathway to success of the company. They main task is to carry out strategic initiatives for the company. This would include to improve the company performance in the market. They must have thorough knowledge about the market and carry out requirements as needed by the company. A ‘SWOT analysis’ must be carried out in advance to identify the risks pertaining to the company. Through this SWOT analysis: the Strengths, Weaknesses, Opportunities and Threats can be spotted and measures to overcome them can be carried out. Risk mitigation is a crucial task which has to be carried out by Non Executive Directors. All the above services for Non Executive Directors have to be carried out.
This would include no form of Conflict of Interests (COI) with the company. The term conflict of interest is considered when a potential opportunity of the company conflicts with the personal interests of the director. A non executive director has to use prudence and judgement in order to ensure that there are no conflicts with the company. This has to be carried out in accordance with the requirement of their appointment.
- Management of Risks
Directors require to have risk management skills in order to mitigate them. Thorough market knowledge is required for directors to carry out the requirements of the firm. Managing of risk is not just related to internal risks of the company, but also includes external risks which the company is prone to. Hence risk management is one of the requirements for non executive directors. Under our services for non executive directors, we would ensure that prudence is carried out related to the appointment of directors.
- Added Value
Non Executive Directors are important executives of the company. They would bring about new business for the benefit of the company. Hence they must have effective people skills and negotiating skills in order to promote the success of the company.
- Develop Professionally
Under our services for non executive directors, we would ensure that professional development is continuously achieved. Through professional development, different outcomes can be achieved by the company.
Directors have to carry out the requirements of the company. Hence they must actively participate in all meetings which are conducted by the company.
Services for Non Executive Directors- What Enterslice can offer you?
At Enterslice, we have an exceptional team of professionals to carry out professional services for businesses and co. Our team of professionals comprise of highly qualified Chartered Accountants, Lawyers and Business Professionals to ensure your company secures the appropriate services. We can offer the following services for Non Executive Directors:
- Company Search
One of our services for Non Executive Directors would include company search and recruitment. We would carry out a conclusive search for companies to hire the right talent. This would be the basis for appointment of Non Executive Directors. We respect the requirement of confidentiality and all information provided to Enterslice would be confidential. Our company search would include providing Non Executive Directors to companies as well as assisting Non Executive Directors who require to be employed by a company.
- Compliance with Rules
One of our main services for non executive directors includes end to end compliance with the requirements of companies. The corporate landscape of India is changing with different circumstances. These changes are directly related to the development of technology and modernisation. The government brings out various laws for the benefit of people. Our services for non executive directors would include compliance checks. These would include complying with the requirements of the Companies Act, 2013, The Securities and Exchange Board of India, 1992, the Reserve Bank of India , Ministry of Corporate Affairs (MCA) and other statutory bodies that bring out different rules for compliance of non executive directors.
- Drafting Appointment Letter
One of our conclusive services for Non Executive Directors would also include drafting the conditions relating to appointment of Non Executive Directors. We have a diverse team of lawyers and compliance executives to carry out the requirements for appointing directors. We would negotiate the conditions related to the appointment letter. Some of the clauses important clauses which would be included in the appointment letter would include the following:
• Blue Pencil Agreements
• Non Compete Provisions
• Responsibilities and Roles
- Terms and Conditions
Our main services for Non Executive Directors are to tailor make the requirements of your company. Hence we would negotiate the terms and conditions related to the appointment of directors.
- Negotiating Non-Compete Requirements
Courts all over the world have come up with different forms of non-compete requirements for directors and other executives of the board. In India also courts have laid down certain requirements for Non-Compete Clauses. As per Indian Contract Act, 1872 such requirements would be an agreement in restraint to carry out valid trade for the company. Non-compete terms are acceptable for non executive directors. However, our services for non executive directors would ensure that such terms are reasonable. This would include negotiating and reviewing the contractual agreement to see if any clause is unreasonable.
Enterslice Advantage- Services for Non Executive Directors
- Enterslice main aims is to add value to you business.
- Our team of professionals comprising of Chartered Accountants, Company Secretaries, Lawyers, and Financial Executives.
- We have experience in negotiating, reviewing contracts and recruiting professionals over the period of 7 years.
- 24*7 customer service.