What are the key provisions under the Companies Act, 2013, with respect to Board Evaluation?

The key provisions in Companies Act, 2013 with regard to Board evaluation are: 1. The Role of the Nominations and Remuneration Committee in performance evaluation of directors Section 178(2): The Nomination and Remuneration Committee shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall specify the manner for effective evaluation of performance of Board, its committees and individual directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance. 2. Independent Directors' role in performance evaluation of Boards, non-independent directors and Chairperson Schedule IV [Part II (2)]: Independent directors are required to bring an objective view in the evaluation of the performance of board and management. Schedule IV (Part VII): The independent directors of the company shall hold at least one meeting in a financial year, without the attendance of non-independent directors and members of management. All the independent directors of the company shall strive to be present at such meeting. The meeting shall: review the performance of non-independent directors and the Board as a whole; review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors; assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. 3. Performance evaluation of Independent Directors Schedule IV Part V: Reappointment - The reappointment of the independent directors would be based on their report of performance evaluation. Schedule IV Part VIII: Evaluation mechanism - The performance of the independent directors would have to be done by the entire Board excluding the director to be evaluated. On the basis of the report of performance evaluation, the continuance or extension of the term of appointment of the independent director would be determined. 4. Inclusion of Performance evaluation in Board' Report According to Rule 8(4) of the Companies (Accounts) Rules, 2014, Every listed company and every other public company having a paid up share capital of twenty five crore rupees or more calculated at the end of the preceding financial year shall include, in the report by its Board of directors, a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors.