Independent Directors to be replaced within 90 days

The Corporate Affairs Ministry has altered the code for independent directors under Schedule IV of The Companies Act, 2013 to replace independent directors who resign or are removed from the Board within 90 days, against the earlier 180 days.

Moreover, the independent directors at their separate meetings need not henceforth review the performance of non-independent directors, of the Board as a whole, or of the Chairman of the Board.

SN Ananthasubramanian, Practicing Company Secretary and former Company Secretaries’ Institute President commented that this development has brought the Companies Act on par with the SEBI’s listing regulations.

“This shorter time period of 90 days will enhance the cause of good governance in unlisted companies also,” he said.