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

Under the Companies Act, 2013, the Nomination and Remuneration Committee of a listed public company must consist of:

The Nomination and Remuneration Committee must have three or more non-executive directors, and at least half of them must be independent directors. The Act does not require every member to be independent, and executive directors are not eligible to be members of this committee.

  1. ATwo or more directors, of whom at least one is independent
  2. BThree or more non-executive directors, of whom not less than one-half are independent directorsCorrect
  3. CThree or more directors, all of whom must be executive directors
  4. DThree or more non-executive directors, all of whom must be independent directors

Explanation

Section 178(1) requires the Nomination and Remuneration Committee to have three or more non-executive directors, with not less than one-half being independent directors. Requiring all members to be independent goes beyond the statute. Executive directors cannot form the committee.

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