05 Apr Cooling period for independent directors: Is there a loophole?
Posted at 05:17h
in Insights
Government and regulators should be on the alert. A 3-year cooling period after two 5-year terms for independent directors will take place in 2024. But companies are searching for a way out by @JayantThakur
April 05, 2024 / 01:45 PM IST
The law provides for a cooling period of three years during which independent directors shall not be associated in any manner directly or indirectly with the company
Highlights
- Company law mandates independent directors to cease holding office after two 5-year terms
- In this period, they should not be associated with the company
- However, some legal experts believe this does not preclude them from being inducted as non-executive directors
- While a plain reading of the law does not support this argument, companies may nevertheless attempt this adventure
- The government and regulators should clear the air on this and put an end to such attempts at overturning the basic tenet of