FAQs

Who is an Independent Director?

An Independent Director is a member of a company's board of directors who does not have any material or pecuniary relationship with the company or its management, apart from sitting on the board. Independent Directors are expected to bring an objective perspective to board deliberations and decisions, free from any conflicts of interest that might compromise their judgment.

How do you get appointed as an Independent Director?

Becoming an Independent Director typically requires a blend of pertinent experience, expertise, and qualifications. Nomination can come from the company's nominating or governance committee, existing board members, or shareholders. Appointment procedures vary based on the company's bylaws and governance standards. With Boardshire, we empower members to enhance their reputation and personal brand. We offer executive services to assist members in accessing opportunities aligned with their goals.

What is the difference between executive and non-executive directors?

The main difference between executive and non-executive directors lies in their involvement in the day-to-day operations of the company:

Executive Directors: These are typically members of the company's management team who are involved in the day-to-day operations and decision-making of the company.

Non-Executive Directors: These directors, including Independent Directors, are not involved in the day-to-day operations of the company. They contribute to the board's oversight, strategic guidance, and monitoring of management performance.

Why are Independent Directors important?

Independent Directors are important for several reasons:

Governance and Oversight: Independent Directors provide oversight and monitoring of management, ensuring that decisions are made in the best interest of shareholders and stakeholders.

Objectivity and Impartiality: Independent Directors bring an objective and impartial perspective to board discussions, free from any conflicts of interest that might arise from being employed by the company.

Accountability: Independent Directors help ensure accountability within the company by asking probing questions, challenging management decisions, and advocating for transparency.

Do Independent Directors get paid?

Yes, Independent Directors typically receive compensation for their service on the board. The compensation may include a combination of cash retainers, meeting fees, and equity-based compensation.

Who is the certifying authority for Independent Directors in India?

In India, the Indian Institute of Corporate Affairs (IICA) is responsible for certifying Independent Directors. Through its certification program, IICA equips aspiring Independent Directors with the essential knowledge and skills needed for effective governance and board leadership. Upon completion, participants receive a certificate, bolstering their credibility and eligibility for board positions in Indian companies. Boardshire’s Independent Directors’ Program (IDP), guides individuals through the certification process and provides e-learning opportunities to facilitate their journey towards becoming certified Independent Directors.

What is IDDB?

IDDB stands for Independent Directors' Databank, which is a centralized online repository of information about individuals serving or willing to serve as Independent Directors on the boards of Indian companies. The Ministry of Corporate Affairs (MCA) of the Government of India established the IDDB to facilitate the selection and appointment of Independent Directors in compliance with regulatory requirements.

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