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CS Executive · Company Law and Practice · Key Managerial Personnel and their Remuneration

Sunrise Textiles Ltd, a company required to have whole-time KMP, appoints its Chief Financial Officer. Under Section 203, how must the appointment of a whole-time KMP be made?

A whole-time KMP is appointed by a resolution of the Board that sets out the terms and conditions of appointment, including remuneration. Section 203(2) does not require a members' resolution for this appointment.

  1. ABy an ordinary resolution of members at a general meeting
  2. BBy a resolution of the Board containing the terms and conditions of appointment, including remunerationCorrect
  3. CBy a special resolution of members with Registrar approval
  4. DBy the Nomination and Remuneration Committee alone, without a Board resolution

Explanation

Section 203(2) says every whole-time KMP shall be appointed by a Board resolution containing the terms and conditions, including remuneration. Member approval is not the prescribed route under this section, so the ordinary resolution option is wrong.

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