The Companies Act 2013 has gone miles towards its social justice objectives. This includes woman director, independent director and small shareholders directors. We have all these provisions in the Act earlier here. The companies (Appointment and Qualification of Directors) Rules 2014 further elaborate these provisions.
Rule 3 of the companies (Appointment and Qualification of Directors) Rules 2014 elaborate the provision of second proviso of sub – section (1) of Section 149 of the Act. The following class of companies shall appoint at least one woman director –
(i) Every listed company;
(ii) Every other public company having –
- Paid – up share capital of one hundred crore or more; or
- Turnover of three hundred crore rupee or more:
All these companies shall comply with this requirement within a period of six month of its incorporation or from the date of when this Rule becomes applicable to these companies. According to explanation to the Rule; the paid up share capital or turnover as on last date of latest audited financial statement shall be taken into account. As the financial year will uniformly close on 31st march and audited financial statement shall be prepared with reference to that date, appointment of a woman director shall be made latest by 30th September.
Any intermittent vacancy of a women director shall be filled – up by the Board at the earliest but not later than immediate next Board meeting or three month from the date of such vacancy whichever is later. This is relevant to note, according to Section 173 of the Act, there will not be a gap of more than one hundred and twenty days intervene between two consecutive meetings of the Board.
A women director may be an executive or a non – executive director or form a promoter director. Even a woman nominated as a nominee director being may satisfy this Rule. Further, a woman director appointed under section 151 as small shareholders director may be a good option. Most people talking about woman director and an independent director in same breath, this may be a good option.
One point, I prefer to mention, an alternate director to a woman director need not be a woman as there is no specific mention in the Act or these Rules but in spirit, alternate director to a woman director should be a woman director.
I want to complete this post with a positive note that this provision will serve on the job training for many women as director; from women of promoters families to professional women promoted to Boards. Firstly, this is good to see, male only promoters groups are now male dominated promoters to start with.
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