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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Effectiveness and Building Better Boards

Sundaram Textiles Ltd, a listed public company, wants its Board, its committees and each director to be evaluated every year. Under the Companies Act, 2013 as reproduced, which body specifies the manner of this evaluation and reviews its implementation and compliance?

The Nomination and Remuneration Committee specifies the manner of evaluating the Board, its committees and individual directors, and reviews implementation and compliance. This duty is placed on it by section 178(2), whereas the Audit Committee's functions concern auditors, financial statements and controls.

  1. AThe Audit Committee
  2. BThe Stakeholders Relationship Committee
  3. CThe Nomination and Remuneration CommitteeCorrect
  4. DThe statutory auditors of the company

Explanation

Section 178(2) requires the Nomination and Remuneration Committee to specify the manner for effective evaluation of performance of the Board, its committees and individual directors and to review its implementation and compliance. The Audit Committee's terms of reference under section 177(4) do not include this task.

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