Describe the performance evaluation of the "Non-Executive Director" (NED).

Performance Evaluation of Non-Executive Directors The performance evaluation of non-executive directors should be by a peer group comprising the entire Board of Directors, excluding the director being evaluated; and Peer group evaluation should be the mechanism to determine whether to extend/continue the terms of appointment of nonexecutive directors. The chairman and other board members should consider the following issues and the individual concerned should also be asked to assess themselves. For each non-executive director: How well prepared and informed are they for board meetings and is their meeting attendance satisfactory? Do they demonstrate a willingness to devote time and effort to understand the company and its business and a readiness to participate in events outside the boardroom, such as site visits? What has been the quality and value of their contributions at board meetings? What has been their contribution to development of strategy and to risk management? How successfully have they brought their knowledge and experience to bear in the consideration of strategy? How effectively have they probed to test information and assumptions? Where necessary, how resolute are they in maintaining their own views and resisting pressure from others? How effectively and proactively have they followed up their areas of concern? How effective and successful are their relationships with fellow board members, the company secretary and senior management? Does their performance and behavior engender mutual trust and respect within the board? How actively and successfully do they refresh their knowledge and skills and are they up to date with: the latest developments in areas such as corporate governance framework and financial reporting? the industry and market conditions? How well do they communicate with fellow board members, senior management and others, for example shareholders. Are they able to present their views convincingly yet diplomatically and do they listen and take on board the views of others? Legal provisions related to Performance evaluation of Non-Executive Directors As per Section 178, The Nomination and Remuneration Committee (NRC) 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. Thus, in case of Companies to whom Section 178 applies, the NRC will specify the manner in which Performance Evaluation of Non-Executive Directors will be carried out. The evaluation may be done by the NRC or the Board of Directors or by an independent external agency. Schedule IV further provides that the independent directors shall review the performance of non-independent Directors which will include non-executive non-independent Directors also, if any. The independent directors shall also review the performance of the Chairperson of the company, taking into account the views of executive Directors and non-executive Directors; Further, in case of Non-Executive Directors who are Independent Directors, the Act provides that the performance evaluation of independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated. On the basis of the report of performance evaluation, it shall be determined whether to extend or continue the term of appointment of the independent director.