In my last post, I had looked at the bare minimum requirements for the board of directors from different types of companies under the Companies Act, 2013 (“Act”).
In this post, let us take a look at specific requirements that apply to unlisted public companies. There are various thresholds specified in different sections of the Act, which aim at making larger companies subject to more stringent corporate governance requirements.
Here we can see a graphic representation of the different thresholds applicable to the composition of the board of directors of unlisted public companies.
These thresholds also apply to the committees of the board of directors. Here is a simple checklist depicting the companies, which must mandatorily set up certain committees.
Remember that the Audit Committee must have a minimum of three directors, the majority of whom should be independent directors. The Nomination and Remuneration Committee must be composed of three or more non-executive directors, the majority of whom should be independent directors. The chairperson of the Stakeholders Relationship Committee must be a non-executive director.
