Who are Board of Directors?

Case breakdown: Movie Sharaabi

The scene shows a board meeting to take place to discuss setting up of a brewery. Vicky Kapoor (played by Amitabh Bachchan) is to 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.

Who are Board of Directors:

Board of directors (BOD) is an elected group of individuals that represent shareholders’. Board of Directors meet 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.

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

Rules for companies in India:

A public company in India must necessarily have a minimum of three directors in India. 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 board chairman is executive director, a minimum 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 case of a public company, 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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