Independent Directors – Roles And Liabilities

Independent directors in India are governed by the Companies Act, 2013 ("Act"). Every listed public company is required to have at least one-third of the total number of directors as independent directors¹ in the board of directors of the company. Every unlisted public company fulfilling the following criteria is required to appoint a minimum of 2 (two) independent directors:

(a) a public company having a paid up share capital of ten crore rupees or more;

(b) a public company having a turnover of one hundred crore rupees or more; or

(c) a public company which has, in aggregate, outstanding loans, debentures and deposits, exceeding fifty crore rupees.²

The Act provides a criterion applicable to independent directors appointed in accordance with the Act³. The Act further provides the following roles and responsibilities of an independent director: