Distinguish between the following: 'Independent director' and 'non-executive director'.

CS Executive · Company Law · PYQS · June 2015
Distinguish between the following: 'Independent director' and 'non-executive director'.

Answer & Explanation:

Non-Executive Director of a company simply means a person not holding a position as an executive in the company. They do not get involved in the day-to-day running of the business. Such a director may or may not be an independent director. An independent director, on the other hand, is one who fulfills the criteria laid down under section 149(6) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Qualification of Directors), Rules, 2014. All non-executive directors need not be independent directors, but all independent directors are non-executive directors.

Topics: Directors

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