Meaning of Separate Committee Meeting of Independent Directors
A separate committee meeting of independent directors (ID) refers to a meeting that is held separately from other meetings, where the independent directors of a company come together to discuss and make decisions on matters related to the company’s governance, such as executive compensation, risk management, and board composition.
Independent directors are board members who are not affiliated with the company in any way, meaning they are not executives or employees. They are appointed to provide an objective perspective and ensure that the company is being run in the best interests of shareholders and stakeholders.
A separate committee meeting of independent directors allows them to discuss important matters in a setting where they are not influenced by the management or non-independent board members. This helps to ensure that decisions are made independently and in the best interests of the company as a whole.
Overall, a separate committee meeting of independent directors is an important aspect of corporate governance that helps to promote transparency, accountability, and responsible decision-making.
Governing Section for Separate Committee Meeting of The Independent Directors
The Meeting of Independent Directors is a gathering of directors of a company who are considered independent, which means they are not involved in the day-to-day management of the company and do not have any financial interest in the company other than their director’s fee. This meeting is mandated by Independent Directors [Schedule IV of the Companies Act 2013 and Regulation 25(3) of SEBI (LODR) Regulations, 2015].
The purpose of this committee meeting is to ensure that the independent directors can meet without the presence of non-independent directors and discuss matters related to the company’s performance, strategy, risk management, and governance. This committee meeting allows the independent directors to share their views and insights freely and without any pressure or influence from the management or other stakeholders.
The committee meeting is usually held at least once a year and can be called by any of the independent directors. The agenda for the meeting is usually prepared by the company secretary or the chairman of the meeting, in consultation with the independent directors. The minutes of the committee meeting is recorded and shared with the board of directors and other relevant stakeholders.
MINUTES OF SEPARATE COMMITTEE MEETING OF THE INDEPENDENT DIRECTORS ON THE BOARD OF INTERNATIONAL LIMITED, HELD ON SATURDAY, 02nd, FEBRUARY 2022 STARTED AT 09:00 A.M. AND CONCLUDED AT 09:30 A.M. AT, NEAR MAYANK TRADE CENTRE, KOLKATA
PRESENT:
- Mr. Sharma (DIN: 00000000) : Non Executive & Independent Director (In Chair)
- Mr. Agarwal (DIN: 00000000) : Non Executive & Independent Director
- Mr. Mohnot (DIN: 00000000) : Non Executive & Independent Director
CHAIRMAN:
Mr. Sharma (DIN: 0000000), Independent Director of the Company was elected as Chairman of the Meeting and presided over the meeting.
At the outset, it was ascertained that there were three independent directors on the Board of Directors of the Company and all of them were present. So, the agenda items were taken one by one as follows;
TO GRANT LEAVE OF ABSENCE:
All Independent Directors were present.
- TO CONFIRM MINUTES OF LAST SEPARATE MEETING OF THE INDEPENDENT DIRECTORS:
The minutes of previous Meeting were read, confirmed and signed by the Chairman as correct.
- TO CONSIDER APPLICABLE PROVISIONS FOR MEETING AND PURPOSE OF THE MEETING:
The Chairman of the Meeting informed that pursuant to Clause VII of Schedule IV of the Companies Act, 2013 read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the independent directors of the Company shall hold at least one meeting in a year, without the attendance of non-independent directors and members of management. Accordingly, the Meeting is being held inter-alia, with a view to review the performance of non-independent directors and the Board as a whole, review the performance of the Chairperson of the Company, taking into account the views of executive directors and non-executive directors; and to assess the quality, quantity and timeliness of flow of information between the Company’s management and the Board.
- TO REVIEW THE PERFORMANCE OF NON-INDEPENDENT DIRECTORS AND THE BOARD AS A WHOLE:
It was discussed that during the financial year 2018-19, the Board performed its duties as follows:
Strategy: The Board effectively provided strategic directions to the Company.
Performance of Management: The Board provided effective directions on key decisions impacting the performance of the Company, effectively reviews the financial performance of the company and suggests corrective actions.
Governance & Compliance: The Board strived towards adapting best practices in governance while also fully complying with the laws of land.
Overall: The process for setting the board agenda was transparent, realistic to the current needs and meeting material was shared well in time. The frequency and duration of the board meetings were adequate to ensure a proper discharge of all the responsibilities. Over all board meeting was held in open and objective manner where there is adequate opportunity for members to share their views.
Thereafter, the performance of the Executive Directors vis-à-vis Board as a whole was taken up for discussion on following parameters:
Performance of Non-Independent Directors: The Non Independent directors on the Board have played an excellent role in better corporate governance. The Board received required disclosures from them. Based on formal and informal appraisals, the Non Independent directors have played role in good governance and handling of day to day affairs efficiently, cost cuttings, market strategies, expansion and growth of Company.
Statutory Compliances and dues: The Company has not defaulted in the payment of statutory dues. Compliances are made well in time.
Overall Performance: The Company has been able to keep itself well positioned in spite of very tough market conditions. The Company’s performance is quite satisfactory vis-à-vis peers as well as the industry.
- TO REVIEW THE PERFORMANCE OF THE CHAIRPERSON OF THE COMPANY:
It was apprised that pursuant to the provisions of Schedule IV read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance of Chairperson has to be reviewed.
The Chairman of the Meeting apprised that the performance of Chairperson of the Company can be ascertained from the fact that despite of tough market conditions, high competition, the performance of Company remained quite satisfactory, which was due to the leadership/guidance given by the Chairperson of the Company. All Independent Directors also took note of the initiatives taken by Chairman of Company in making expansion of business. The Chairman of the Meeting based on formal and informal appraisal appraised the role played by Chairman of the Company in cost reduction, day to day affairs, strategic management, good corporate governance and expansion of the business.
- TO ASSESS THE QUALITY, QUANTITY AND TIMELINESS OF FLOW OF INFORMATION:
The Chairman of the Committee apprised that pursuant to the provisions of Schedule IV read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors are inter alia required to assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
The Chairman further said that the process for setting the board agenda is transparent, realistic to the current needs and meeting material is shared well in time. He further stated that all the information required by the Committees, as well as Board, is provided by the Management of the Company well in time especially the financial results, internal audit reports, overdue secured loans if any, observations if any of statutory auditors/secretarial auditors and other information as required to be provided under the law.
All the independent directors were quite satisfied with the flow of information.
Thereafter, the meeting concluded with a vote of thanks to the Chair.
Date of entry of the Minutes: 15.02.2022
| Signature of the Chairman: | |
| Date of Sign: | |
| Place of Sign: |
Composition for Separate Committee Meeting of Independent Directors
The Companies Act of 2013 mandates that listed companies must have a minimum of one-third of their board members as independent directors. Independent directors are appointed to provide an objective and unbiased perspective on the company’s decision-making process. The Act also requires companies to have a separate committee of independent directors to oversee certain key areas of governance.
This committee, known as the Independent Director Committee, is responsible for overseeing the following areas:
- Appointment, reappointment, and removal of directors.
- Board evaluation and performance.
- Determining the remuneration of key managerial personnel.
- Overseeing the company’s risk management framework.
The Independent Director Committee must meet at least once a year and maintain minutes of their meetings. The minutes must be placed before the company’s board of directors at the next board meeting.
The Act also specifies that the Independent Director Committee must consist of a minimum of three independent directors, with at least one member having expertise in finance or accounting. The Chairperson of the committee must also be an independent director and will be responsible for leading the committee meeting. This Committee Meeting shall result in good corporate governance.
In conclusion, the Companies Act of 2013 recognizes the importance of independent directors in ensuring good corporate governance. The establishment of a separate Independent Director Committee is a key step in promoting transparency, accountability, and responsible decision-making within the company.
Summary Separate Committee Meeting
In conclusion, a separate committee meeting of independent directors is a vital component of corporate governance that allows independent board members to discuss and make decisions on matters related to the company’s governance. By providing an independent perspective, independent directors can ensure that decisions are made in the best interests of the company and its stakeholders.
Separate committee meeting of independent directors are particularly important when considering matters related to executive compensation, risk management, and board composition. These meetings allow independent directors to discuss and make decisions on these topics without being influenced by management or non-independent board members, ensuring that the company is being run in a responsible and ethical manner.
Overall, separate committee meeting of independent directors are an essential aspect of good corporate governance, helping to promote transparency, accountability, and responsible decision-making. By providing an independent voice and ensuring that decisions are made in the best interests of the company and its stakeholders, independent directors play a crucial role in helping to create and maintain a culture of ethical and responsible business practices.