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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Conceptual Framework of Corporate Governance

Kaveri Pharma Ltd, a listed company, has an executive Chairperson who is also the promoter's brother. The board has 8 directors. Applying the SEBI LODR board composition norm for this fact pattern, what is the minimum number of independent directors?

Because the Chairperson is executive and related to the promoter, at least half of the board must be independent. For an eight-member board that means four independent directors. The one-third norm applies only to a non-executive Chairperson who is unrelated to promoters.

  1. A2
  2. B3
  3. C4Correct
  4. D6

Explanation

Where the Chairperson is executive, or is a promoter or related to a promoter or senior management, at least half of the board must be independent. Half of 8 is 4. Choosing 3 wrongly applies the one-third norm meant for a non-executive, unrelated Chairperson (8/3 rounded up).

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