SEC 149(6) of The Companies Act provides the ambit and responsibilities of the independent directors. An independent director is a non-executive director of a company who helps the company in improving corporate credibility and governance standards. He/ She does not have any kind of relationship with the company that may affect the independence of his/ her judgment. The term “Independent Director” has been defined in the Act, along with several new requirements relating to new requirements relating to their appointment, duties, role, and responsibilities.
The liability of an independent director is under Sec 149(12) of the Companies Act. If any independent director has attended or participated in board meetings or has merely received minutes of such meetings and has failed to record his or her concerns or objections, then such an independent director cannot escape prosecution claiming that decision was not taken with his concurrence and knowledge.
D&O liability insurance policy provides cover for independent directors under a special excess limit which is over and above the limit of liability being purchased by the company.
Please login or Register to submit your answer