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

Under the Companies Act, 2013, which body of a listed public company's Board formulates the criteria for determining the qualifications, positive attributes and independence of a director?

The Nomination and Remuneration Committee formulates the criteria for determining a director's qualifications, positive attributes and independence. It also recommends the remuneration policy to the Board. The Stakeholders Relationship Committee handles only security holders' grievances, so it is not the right body.

  1. AStakeholders Relationship Committee
  2. BNomination and Remuneration CommitteeCorrect
  3. CAudit Committee
  4. DStatutory auditors of the company

Explanation

Section 178 requires the Nomination and Remuneration Committee to formulate the criteria for determining qualifications, positive attributes and independence of a director and to recommend a remuneration policy to the Board. The Stakeholders Relationship Committee only considers and resolves grievances of security holders.

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