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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights

Mehta Auto Ltd, a company with 2,000 security holders, constituted a Stakeholders Relationship Committee. Its chairperson Ms. Rao, a non-executive director, is unwell on the day of the annual general meeting. What does Section 178 permit?

Another member of the committee, authorised by the chairperson, may attend the general meeting. Section 178(7) requires the committee chairperson to attend general meetings or, in his absence, any other committee member authorised by him. Representation is not optional, and an outsider such as a shareholder cannot substitute.

  1. AAny shareholder present may speak for the committee
  2. BAny other member of the committee authorised by her may attend the general meetingCorrect
  3. CThe committee need not be represented at the meeting
  4. DOnly the managing director may attend for the committee

Explanation

Section 178(7) requires the chairperson of each committee, or in absence any other member authorised by him, to attend general meetings. Thus an authorised committee member can attend. The managing director need not be a member, and representation is mandatory, not optional.

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