Most companies now need to have at least one woman and two independent directors, while the listed entities will be required to have a director to represent the interests of small shareholders if they demand.
The new requirements are part of the rules related to the appointment and qualification of directors under the Companies Act, 2013. Applicable to certain class of companies, the norms will be operational from April 1.
Under the rules notified by the Corporate Affairs Ministry, every listed company and those public firms having paid up share capital of Rs 100 crore or more should have at least one woman director on their board.
It will be also applicable to entities with a minimum turnover of Rs. 300 crore.
“…any intermittent vacancy of a woman director shall be filled up by the board at the earliest but not later than immediate next board meeting or three months from the date of such vacancy whichever is later,” the ministry has said.
Besides, certain class of corporates are required to have at least two independent directors on their respective boards. The rule would apply to public companies having minimum paid up share capital of Rs 10 crore and those where their aggregate “outstanding loans, debentures and deposits” exceed Rs 50 crore, according to the notification dated March 27.
With regard to independent directors also, the vacancies should be filled up at the earliest — not later than the next board meeting or three months from the date of the post falling vacant.
For the purpose of complying with the rules, the paid up share capital and turnover, among others, as recorded in the latest audited financial statements should be taken into consideration by the companies.