Independent directors have a crucial role to play for keeping good governance practices. Ministry of Corporate Affairs (“MCA”) along with Indian Institute of Corporate Affairs (IICA) has developed a databank of Independent Directors in accordance with the provisions of Section 150 of the Companies Act, 2013.
APPLICABILITY:
- Individual already acting or aspiring to become Independent Director; and
- The Companies which are required to appoint Independent directors.
COMPLIANCE BY PERSON ALREADY AN INDEPENDENT DIRECTOR
|
1 |
Submission of Application with Institute | 29-02-2020 |
|
2 |
Passing of examination conducted by Institute | 28-02-2021 |
|
3 |
Submission of declaration with Board of Director | As the time of declaration u/s 149(7) |
EXEMPTION FROM PASSING THE ONLINE PROFICIENCY SELF ASSESSMENT TEST
Individual (on date of inclusion of his name in the databank as director or KMP) served for a period of not less than ten years as in a listed public company or in an unlisted public company having a paid up share capital of rupees ten crore or more shall not be required to pass the online proficiency self-assessment test.
IMPORTANT DATES AND TIMELINES:-
|
S. No. |
Particular of Compliance | Time Period |
|
1 |
Start Date of Empanelment/ registration of individuals and companies | December 1st, 2019 onwards |
|
2 |
End date for Empanelment of Existing Independent Directors | February 29th , 2020 |
|
3 |
Start date for slot booking for online proficiency self-assessment test | December 2nd, 2019 |
|
4 |
Start date of (Mock) Practice Date | December 2nd , 2019 onwards |
|
5 |
Start date for Online proficiency self-assessment test | March 1st, 2020 |
|
6 |
Start date for Corporate access and search facility | March 01, 2020 |
PROCESS ON DATABANK PORTAL FOR CORPORATES
PROCESS ON DATABANK PORTAL FOR INDEPENDENT DIRECTORS
RISK EXPOSURE
If any existing Independent Director failed to register himself on the Databank till the last date i.e. 29th February 2020, so Director will be ceased to be the Independent Director of the Company from that date or the office of the concerned will be vacated as Independent Director of that Company or anywhere he/ she will be an Independent Director.
IMMEDIATE IMPACT ON INDUSTRY
Positive Impact-
- Ensures Professionally Trained ID’s
- Capacity Building of Professionals
- Company may have a one stop place to look for the desired mentor
Negative Impact-
- Increased Compliance Cost
- Implementation challenges due to closely defined timelines which will be difficult to address by the existing Board
- Leading to undesired resignation due to technical challenges
