K YAMUNA (ASST.PROF. CREC) ACCOUNTING FOR MANAGERS (17CE00103)
163 CHADALAWADA RAMANAMMA ENGINEERING COLLEGE (AUTONOMOUS)
4. Function of the board: Review of corporate strategies, giving strategic guidance, major plans
of action, risk policy, annual budgets and business plans, setting performance parameters,
maintaining transparent board nomination process, monitoring potential conflict with different
stakeholders, monitoring effectiveness of governance practices, integrity of financials reporting
process and internal controls, management, compliances with law, communication with
stakeholders, hiring and compensating including succession plan of key executives, overseeing
of major capex, acquisition, divestments, work in good faith in a responsible manner , overview
process of disclosure and communication, monitoring board evaluation process, training to
directors, set a corporate culture and should work in best interest of the company with high
ethical standards, and should have independent judgment .Allow independent directors and
committee to function properly and also intimate them their role as board members and
committee member. Composition of Board: 1. At least one woman director 2. Minimum 50% of
the board should be independent if chairman of the board is executive director. If chairman is
non executive Director (NED) than 1/3 of the board should be independent. If chairman is non
executive but is a promoter or related to promoter or to any person one level below board, than
1/2 of the board should be independent.
5. Independent directors: He is a person who: • Is a person of 21 years or more • who possesses
integrity and relevant expertise in board‘s view • is neither executive director nor a nominee
director • is not related to any of promoter/director of company (including of holding,
subsidiary(subs), and associate). • Who is not and was not a promoter of the company (including
of holding, subs and associate) at any point of time. • Apart from receiving sitting fee/directors
remuneration, he does not have or had any time any material pecuniary relationship with
company, holding, subs or associate or their promoter/directors in current year and previous two
years. • Same requirement applies for his relative also if they have such transactions with the
company amounting to 2% or more of gross turnover or income or Rs. 50 lacs whichever is
lower. • Along with his relatives does not hold 2% or more of voting power or his relative does
not have or have been in following positions in any of the preceding 3 financial years
immediately preceding the financial year in which he is proposed to be appointed.. • employee or
KMP of company (co.), holding, subs or associate • employee, partner, proprietor of a CA, cost
audit, co secretary firm, of co. holding, subs or associate or • Employee, partner, proprietor of a