Cap independent directors’ pay from a company to 20%: Govt panel

Cap independent directors’ pay from a company to 20%: Govt panel

An eight-member committee led by corporate affairs secretary Injeti Srinivas has recommended to cap the remuneration of an Independent director at 20% of his/her total income. The proposed pay cap seeks to prevent independent directors from developing cosy relationships with company managements and prevent conflicts of interest. The cap excludes the fee they get for attending board meetings. The ceiling has been proposed to prevent any material pecuniary relationship, which could impair his independence on the board of the company. “The proposed cap is fair. If an independent director gets 60% of his income from one company, how can he be considered independent,” asked one of the two people cited before. Independent directors are tasked with protecting the interests of minority shareholders, who are not represented on company boards.

Read More at Livemint News date : 28 Aug 2018, Tuesday

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