Date:21/11/2006 URL: http://www.thehindubusinessline.com/2006/11/21/stories/2006112102800300.htm

Back CII supports panel suggestions on corporate boards

Our Bureau

New Delhi , Nov 20

The CII is in agreement with the suggestion made by the Expert Committee on Company Law that a subsidiary company should not be required to necessarily co-opt an independent director of its holding company as an independent director on its board.

The chamber, in a submission to the Ministry of Company Affairs, has supported the Dr JJ Irani Committee recommendation that corporate boards should comprise one-third independent directors, irrespective of whether the Chairman is executive or non-executive.

On another issue, CII has reasserted the stance upheld under clause 49 of the Listing Agreement, which deems nominee directors as independent directors.

It is true that nominee directors represent specific interests and have certain specific obligations, but that does not affect their independence vis-à-vis promoter-directors, according to the chamber. The CII has also suggested that nominee directors be excluded from the board strength for the purpose of calculating the percentage of independent directors.

CII also supports the view that all non-executive directors should be treated at par and be held liable for prosecution for not complying with the applicable provisions.