Glossary · Corporate Law
Independent Director
A non-executive director of a company who has no material relationship with the company and is not part of the promoter group, as defined under Section 149(6) of the Companies Act, 2013.
Listed public companies and prescribed classes of unlisted public companies must have at least 1/3 of total directors as independent directors. They hold office for a term of up to 5 consecutive years and are appointed through a special resolution. They are barred from participating in the day-to-day management and serve on specific committees like Audit, Nomination and Remuneration, and Stakeholder Relationship.
Examples
A former SEBI officer serves as an independent director on the boards of two listed companies, chairing their audit committees.