{"id":107601,"date":"2022-04-26T09:52:11","date_gmt":"2022-04-26T04:22:11","guid":{"rendered":"https:\/\/legalwindow.in\/?p=107601"},"modified":"2022-12-27T10:47:29","modified_gmt":"2022-12-27T05:17:29","slug":"composition-of-the-board-of-directors-of-a-listed-company-in-india","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/composition-of-the-board-of-directors-of-a-listed-company-in-india\/","title":{"rendered":"Composition of the Board of Directors of a Listed company in India"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-107607\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Composition-of-the-Board-of-Directors-of-a-Listed-company-in-India.png\" alt=\"Composition of the Board of Directors of a Listed company in India \" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Composition-of-the-Board-of-Directors-of-a-Listed-company-in-India.png 1200w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Composition-of-the-Board-of-Directors-of-a-Listed-company-in-India-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Composition-of-the-Board-of-Directors-of-a-Listed-company-in-India-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Composition-of-the-Board-of-Directors-of-a-Listed-company-in-India-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Composition-of-the-Board-of-Directors-of-a-Listed-company-in-India-768x403.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">A board of directors is a panel of people elected to represent shareholders. \u00a0The board is in charge of protecting shareholders\u2019 interests, establishing policies for management, oversight of the\u00a0corporation or organization, and making important decisions on issues a company or organization faces. This blog talks about the \u2018Composition of the Board of Directors of a Listed company in India\u2019.<\/span><\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"border: 1px solid #555;\"><b>Table of Content<\/b><\/p>\n<ul>\n<li><a href=\"#Board\">Board of Directors and its Composition<\/a><\/li>\n<li><a href=\"#Other\">Other Requirements for Composition<\/a><\/li>\n<li><a href=\"#Structure\">Structure of Board of Directors<\/a><\/li>\n<li><a href=\"#Composition\">Composition of Board of Directors in a Listed Company<\/a><\/li>\n<li><a href=\"#Conclusion\">Conclusion<\/a><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"Board\"><b>Board of Directors and its Composition<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The board of directors can be knowns as the brain of the company as they are responsible for taking all the big decisions and making policy changes for the company. The decisions are taken in the special meetings members of the board held together, which meeting is known as \u2018Board Meetings\u2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Section 149(1) of the <\/span><span style=\"font-weight: 400;\">Companies Act,2013<\/span><span style=\"font-weight: 400;\"> talks about the minimum and maximum number of directors in a company. The following points are in the section:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The minimum number of directors in a <\/span><a href=\"https:\/\/legalwindow.in\/private-limited-company\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Private Limited Company<\/span><\/a><span style=\"font-weight: 400;\"> is 2;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For the <\/span><a href=\"https:\/\/legalwindow.in\/public-limited-company\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Public Company<\/span><\/a><span style=\"font-weight: 400;\"> it is 3 directors; and,<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">An <\/span><a href=\"https:\/\/legalwindow.in\/one-person-company\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">OPC<\/span><\/a><span style=\"font-weight: 400;\"> shall have a minimum of 1 director.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">However, the maximum number of directors a company have is 15. The no of directors can raise the number of directors beyond 15. And the change in the number of the director is by passing a special resolution in the general meeting.<\/span><\/p>\n<h2 id=\"Other\"><b>Other Requirements for Composition\u00a0<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The maximum number of companies that an individual can become a director of, is 20 companies.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At least one director, who has lived in India for a minimum\u00a0of 182 calendar days of the previous year, shall be appointed by every company\u2019s board. It is a mandatory rule.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At least, a one-woman director must be there in the company.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">All listed companies must have at least one-third proportion of their board of directors as independent directors.<\/span><\/li>\n<\/ul>\n<h2 id=\"Structure\"><b>Structure of Board of Directors<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Board of Directors members have different places within the panel. The composition of the board varies on the companies and state laws. \u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The size of the directors has certain limits as per a company as the minimum and maximum limit in its\u00a0Articles of Association. Companies commonly have 3 to 31 directors. Following are some designations and positions common to a Board of Directors in public companies:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Chairman of the Company<\/b><span style=\"font-weight: 400;\">: A chairman of a company leads the board and thus heads the committee or board meetings. The chairperson is elected by the votes of the Board of Directors. Generally, the company\u2019s chief executive officer is the chairman.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Executive Director of the Company:<\/b><span style=\"font-weight: 400;\">\u00a0Executive director is an individual who takes active participation in the company\u2019s administration,\u00a0business procedures, sales, and finances. An executive director is a part of the board and also gets a salary for the company.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Non-Executive Director of the Company:<\/b><span style=\"font-weight: 400;\">\u00a0A\u00a0non-executive director\u00a0doesn\u2019t belong to the organization but is a part of the board. Such directors provide critical opinions and advice by charging a certain fee. In addition, they give voice to stakeholders outside a firm.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Managing Director of the Company<\/b><span style=\"font-weight: 400;\">: There are no restrictions on the number of directors in a company by law. A managing director is an individual whose selection is by the company\u2019s executive directors for managing, guiding, and monitoring business functioning.<\/span><\/li>\n<\/ul>\n<p><b>Other designations in the company are<\/b><span style=\"font-weight: 400;\">: Vice Presidents, CFOs, treasurer, zonal head, vigilance chief, audit chief, etc.,\u00a0are some other designations common to a BOD.<\/span><\/p>\n<h2 id=\"Composition\"><b>Composition of Board of Directors in a Listed Company<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">According to Regulation 17 of Securities and Exchange of India (Listing Obligations and Disclosure Requirement) 2015, the following are the composition of the Board of Directors in a listed company:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Board of directors shall have a mixture of executive and non-executive directors with at least one-woman director and not less than 50% of the board of directors shall constitute non-executive directors.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the chairperson of the board of directors is a non-executive director, then at least one-third of the board of directors shall constitute independent directors and if the listed entity has an executive chairperson, then at least half of the board of directors shall comprise of independent directors.<\/span><\/li>\n<\/ul>\n<h2 id=\"Conclusion\"><b><a href=\"https:\/\/legalwindow.in\/dir-3-kyc-of-directors\/\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-110362 size-full\" title=\"Get DIR-3 KYC done for directors\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Get-DIR-3-KYC-done-for-directors-in-1000-All-Inclusive.-1.png\" alt=\"Get DIR-3 KYC done for directors\" width=\"1000\" height=\"200\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-DIR-3-KYC-done-for-directors-in-1000-All-Inclusive.-1.png 1000w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-DIR-3-KYC-done-for-directors-in-1000-All-Inclusive.-1-600x120.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-DIR-3-KYC-done-for-directors-in-1000-All-Inclusive.-1-300x60.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-DIR-3-KYC-done-for-directors-in-1000-All-Inclusive.-1-768x154.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a>Conclusion<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Therefore, it is clear from the above that the board of directors can have 3 to 30 members. Section 149(1) of the <a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_2013\" target=\"_blank\" rel=\"noopener\">Companies Act, 2013<\/a> talks about the minimum and the maximum number of directors in a company.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you want to get to know more about this contact us and get advice from legal experts.\u00a0 <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A board of directors is a panel of people elected to represent shareholders. \u00a0The board is in charge of protecting shareholders\u2019 interests, establishing policies for management, oversight of&hellip;<\/p>\n","protected":false},"author":5,"featured_media":107606,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[],"class_list":["post-107601","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-compliance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Composition of the Board of Directors of a Listed company in India<\/title>\n<meta name=\"description\" content=\"Latest Article - Composition of the Board of Directors of a Listed company in India. 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