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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Processes through Secretarial Standards

At a Board meeting of Sagar Infra Ltd, director Mr Rao dissented from one resolution. The Chairman, believing the dissent would embarrass the company, directs the company secretary to leave it out. Which statement best reflects section 118?

Mr Rao's dissent must be recorded. Section 118(4)(b) makes the names of dissenting or non-concurring directors a mandatory part of Board minutes for each resolution, and the Chairman's discretion covers only the specified grounds for exclusion.

  1. AThe Chairman may omit it because he has absolute discretion over all content of the minutes
  2. BThe dissent must be recorded, since the minutes must contain the names of directors dissenting from or not concurring with each resolutionCorrect
  3. CIt may be omitted if the other directors agree
  4. DIt is recorded only if Mr Rao requests a separate letter

Explanation

Section 118(4)(b) requires Board minutes to contain, for each resolution, the names of directors dissenting or not concurring. The Chairman's discretion under 118(5)-(6) covers only defamatory, irrelevant or immaterial matters, or matters detrimental to the company's interests, and is not a power to omit a mandatory item such as a dissent.

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