Govt plans to bound directorship to 5 firms
By siliconindia   |   Thursday, 25 November 2010, 19:02 IST
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Govt plans to bound directorship to 5 firms
Bangalore: Government has made a decision to allow individuals to take directorship on boards of just five listed companies. Earlier a person could serve as independent director on boards of 15 listed or unlisted public companies. It was unlimited on number of private companies' boards an individual could be co-opted. Once Parliament approves the amended Companies Bill 2009, independent directors will not be eligible for employees' stock options (Esops) as well. The government also plans to provide higher sitting fees to independent directors. Central government will also prescribe the sitting fees to be paid to directors in proportion to net worth or turnover. Government officials involved in finalising Companies Bill 2009 based on recommendations of parliamentary standing committee on finance headed by former finance minister Yashwant Sinha said they would go ahead accepting the panel's suggestions. Other key suggestions regarding independent directors are to make their appointment process independent of a company's management. This could be done by constituting a panel or a data bank to be maintained by the ministry of corporate affairs. The government is confident of tabling the bill in winter session and enacting the bill into law by end of this financial year.

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