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CMA Intermediate · Business Laws and Ethics · Directors - Role, Responsibilities, Qualification, Appointment, Removal, Remuneration and Powers

Sagar Textiles Ltd, a listed public company, has Mr. Rao as its executive chairperson. The Board wants to make him a member and also the chairperson of the Nomination and Remuneration Committee. Under the Companies Act, 2013:

The chairperson of the company, whether executive or non-executive, may be appointed a member of the Nomination and Remuneration Committee but cannot chair it. So Mr. Rao can be a member, but someone else must chair the Committee.

  1. AHe can be both a member and the chairperson of the Committee
  2. BHe cannot be a member because he is an executive director
  3. CHe can be a member of the Committee but cannot chair itCorrect
  4. DHe can chair the Committee but cannot vote in it

Explanation

The proviso to Section 178(1) states that the chairperson of the company, whether executive or non-executive, may be appointed as a member of the Committee but shall not chair it. So membership is allowed, chairing is not.

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