Independent Director - Material Pecuniary Relationship

[shankar shankar]

Dear Friends,

‘independent director’ means non-executive director who:

(a) Apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the director

(b) Is not related to promoters or persons occupying management positions at the board level or at one level below the board

(c) Has not been an executive of the company in the immediately preceding three financial years

(d) Is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following :

(i) The statutory audit firm or the internal audit firm that is associated with the company, and

(ii) The legal firm(s) and consulting firm(s) that have a material association with the company

(e) Is not a material supplier, service provider or customer or a lessor or lessee of the company, which may affect independence of the director

(f) Is not a substantial shareholder of the company i.e. owning two percent or more of the block of voting shares.

Could you tell me what constitutes or what is the criteria to define a pecuniary relationship as MATERIAL pecuniary relationship?

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CS K.Sankara Subramanian,

            B.A.B.L., ACS
Cethar Energy Limited, Trichy.

[CS A Rengarajan]

Whatever the definition of independent directors, it is letter and spirit are not followed in some companies.  Had satyam followed the  good corporate governance, there is no scam. We are not ready to accept the truth.  ,Many listed companies still paying commission to independent directors and how he can be called as independent directors.  He is not independent directors but in dependent directors.

Again how many companies are following corporate governance as per rules and regulations.

Once we follow good corporate governance both for listed and unlisted entities, there will be  huge revenue collections for the government. As a result, rate of taxes will come down.

Truly speaking  there is no good corporate governance.  Corporates are only looking to have tax planning or avoid taxes

Contrary view solicited.

Best Regards

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csarengarajan
Company Secretary, Chennai
email csarengarajan@gmail.com

http://www.csarengarajan.blogspot.com

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