New Delhi: Easing norms, the government has said an independent director`s previous tenure would not be counted towards the ten-year period limit, as mandated under the new companies law, provided that the individual is appointed afresh before March 2015.
The move comes after various stakeholders had sought clarifications on several aspects of the Companies Act, 2013, including those related to appointment and qualification of independent directors.
Under the new Act, an independent director can have a maximum of two tenures of five consecutive years (a total of ten years), with a cooling off period of three years.
"It has also been clarified that if a company intends to continue an existing independent director, his appointment would need to be made expressly afresh under the Act before March 31, 2015, and his earlier tenure will not be counted for such fresh appointment under the Act," the Corporate Affairs Ministry said.
The Ministry is implementing the Companies Act.
In a circular yesterday, the Ministry also clarified that "in case of an independent director, "pecuniary relationship does not include receipt of remuneration, as independent director,from the holding, subsidiary or associate company".