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CSEET · Economic and Business Environment · Elements of Corporate Governance

Section 178 lays down who may chair the Nomination and Remuneration Committee. Which statement is correct about the chairperson of the company?

The chairperson of the company, whether executive or non-executive, may be appointed a member of the Nomination and Remuneration Committee but shall not chair it. The proviso to Section 178(1) permits membership while specifically barring that person from leading the committee.

  1. AThe chairperson of the company may be a member of the committee and may also chair it
  2. BThe chairperson of the company may be a member of the committee but shall not chair itCorrect
  3. CThe chairperson of the company cannot be a member of the committee
  4. DThe chairperson of the company must chair the committee if executive

Explanation

The proviso to Section 178(1) permits the chairperson of the company, whether executive or non-executive, to be a member of the Nomination and Remuneration Committee but not to chair it. Hence being a member is allowed while chairing is barred.

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