Who is the Board of Directors?

Learn about BOD with Amitabh Bachchan
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Case breakdown: Movie Sharaabi

The scene shows a board meeting taking place to discuss the setting up of a brewery. Vicky Kapoor (played by Amitabh Bachchan) is the partial owner of the factory. He walks into the meeting quite late and is drunk. He isn’t cordial to any of them and all of them walk out of the meeting by the end of the scene. This blog, Learning Perspectives will explore the meaning of the board of directors.

Who is the Board of Directors?

A Board of directors (BOD) is an elected group of individuals that represent shareholders’. The Board of Directors meets quarterly and in special cases to discuss policies for corporate management. They are considered to be at the highest level of management. They can also be called the processing unit or brain of the organization.

The Board of directors of a company is central to the decision-making and governance process. it is liable to ensure compliance with the corporate governance law.

Rules for companies in India:

Who is the Board of Directors?
BoD

A public company in India must necessarily have a minimum of three directors in India. The maximum number of directors can be fifteen. As an individual, one can be a director of twenty companies. At least 1 women director should be appointed by the company. Listed companies should have one-third of the directors as independent directors. At least 50% of the board should be non-executive directors. In case the board chairman is an executive director, a minimum of half of the directors should be independent.

Appointment and Removal:

Presently, as per the provisions of Schedule XIII to the Companies Act, it is necessary to obtain the approval of the Central Government for appointing a person who is not resident in India, i.e. a person who has not been staying in India for a continuous period of not less than 12 months immediately preceding the date of his appointment as a managerial person.

Registrars of Companies (ROC) should be informed in case of appointment/ removal/resignation/ death or otherwise by the company.

Resignation by the director should be recognized as his/her right.

No age limit is prescribed by the law. In the case of a public company, the appointment of directors beyond a prescribed age say 70 years, should be subject to a special resolution by the shareholders which should also prescribe his term. 

References:

https://www.mca.gov.in/MinistryV2/management+and+board+governance.html

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