Company Secretaries body for cap on directorships
By admin at 6 November, 2009, 11:43 am
The Institute of Company Secretaries of India (ICSI) has suggested that the number of directorships for an individual should be capped at 15.
The maximum number of listed companies in which an individual can serve as a director should be restricted to seven.
The ICSI, which has submitted a list of recommendations to Mr Salman Khursheed, the Union Minister for Corporate Affairs, here on Thursday said that the number should encompass the directorships in public and private companies (including holding or subsidiary firms).
The institute has also called for a maximum tenure of six years specified for independent directors.
Annual Report
“Induction training of directors should be made mandatory, covering role, responsibilities and liabilities of a director. There should be a statement to this effect by the board in the annual report,” it said in the 46-page recommendations to the Minister.
It called for a standard structure of the annual report, keeping in view the enhanced disclosure requirements. “Annual reports have become very large and unwieldy. So, the presentation of information in the annual reports should be standardised,” it said.
The institute also wanted the Government to increase the responsibility of the corporates in complying with the corporate governance laws. “Mandate constitution of Corporate Compliance Committee in all public limited companies with paid-up capital of Rs 5 crore or more,” it said.
The Directors’ Responsibility Statement should include a statement that the directors had devised proper systems to ensure compliance of all laws applicable to the company and that such systems were adequate and operating effectively.
With regard to remuneration, the institute felt that the policy should be strongly linked to the company’s performance.
It also wanted clarity on the term ‘relative’ defined under the Companies Bill, 2009. The term ‘lineal ascendants and descendants’ should be clarified by giving an indicative list.
Source : Hindu Business Line
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