Alchema Infratech Ltd, is a leading Execution, Procurement and Construction (EPC) company specializing in construction of national highways, expressways, railway tracks and other civil infrastructure projects and has a p

CS Professional · Environmental, Social and Governance (ESG) Principles and Practice · PYQS · June 2025
Alchema Infratech Ltd, is a leading Execution, Procurement and Construction (EPC) company specializing in construction of national highways, expressways, railway tracks and other civil infrastructure projects and has a paid-up share capital of ₹ 500 crore. The Company has its registered office in New Delhi and has been a key player in infrastructure projects across India. AGP & Co LLP, Chartered Accountants are the statutory auditors of the Company and have two more years of tenure as per the provisions of the Companies Act, 2013. Presently, the Company has Kukur and Kusam on its Board of Directors as independent directors. The Company was planning to appoint another independent director to strengthen its governance practices. Meyil, a director of the Company had a good rapport with Praneyi, and wanted to appoint him as an independent director, given his expertise and understanding of finance. Praneyi was working as a Senior Audit Manager with AGP & Co LLP during the financial year 2019-20 and was well acquainted with the Company's processes and its management. Since last five years, Praneyi was working as an independent consultant with few corporates providing them advisory services. He was delighted to be on the Board of Alchema, when Meyil reached out to him with his request. Upon Praneyi's consent, Meyil asked Huma, the Company secretary to convene a board meeting to appoint Praneyi as an independent director. As it was annual return filing season, Huma was busy with completing the compliance requirements. While sending notices, she did not send the copy of requisition to Meyil. As Articles of the Company does not provide for procedure of conducting the meeting, the meeting was convened on a public holiday at 6 p.m. at Meyil's residence in Chandigarh. Sufil, another director on the Board of the Company, raised the following objections pointing out procedural irregularities : Notice did not contain the serial number of the meeting Notice was served through courier rather than mail/registered post Meeting was convened on public holiday, after working hours, and Meeting was held in Chandigarh which is located in a State different from the State of Company's registered office. In the background of above facts answer the following questions : 'It is considered a good practice to designate an independent director as a lead independent director.' Elucidate the concept of lead independent director and his/her role in the Company.

Answer & Explanation:

Appointment of Lead Independent Director Internationally, it is considered a good practice to designate an independent director as a lead independent director or senior independent director. The lead independent director is a highly versatile intermediary between the chair, the board and the board's stakeholders. The lead independent director must keep a keen eye on whether the chair is performing their role to the board's satisfaction without losing objectivity or independence. They monitor the relationship between the chair and the CEO, and ensure that it is a well-functioning working relationship without becoming too close or powerful. The lead independent director also coordinates the activities of other non- employee directors and advises the chairman on issues ranging from the schedule of board meetings to recommending retention of advisors and consultants to the management. Role of the lead independent director Acts as the principal liaison between the independent directors of the Board and the Chairman of the Board; Develops the agenda for and preside at executive sessions of the Board's independent directors; Advises the Chairman of the Board as to an appropriate schedule for Board meetings, seeking to ensure that the independent directors can perform their duties responsibly while not interfering with the flow of Company operations; Approves with the Chairman of the Board the agenda for and Board Committee meetings and the need for special meetings of the Board; Advises the Chairman of the Board as to the quality, quantity and timeliness of the information submitted by the Company's management that is necessary or appropriate for the independent directors to effectively and responsibly perform their duties; Recommends to the Board the retention of advisors and consultants who report directly to the Board; Interviews, along with the chair of the Nominating and Corporate Governance Committee, all Board candidates, and make recommendations to the Nominating and Corporate Governance Committee; Assists the Board and Company officers in better ensuring compliance with and implementation of the Governance Guidelines; Serves as Chairman of the Board when the Chairman is not present; and Serves as a liaison for consultation and communication with shareholders.

Topics: Corporate Governance

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