Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board's Accountability on ESG

Veda Textiles Ltd, a listed company, has a board of six directors, all men. The nomination committee notes that the board lacks diverse perspectives and cannot adequately oversee social and sustainability issues. Under the Indian listed-company framework, which step most directly addresses the statutory gender diversity requirement?

Appointing at least one woman director addresses the statutory gender diversity requirement. Listed companies must have a woman director under company law, and the top listed entities need a woman independent director under listing rules. Changing auditors or executives does not meet this requirement.

  1. AAppoint at least one woman director to the boardCorrect
  2. BAppoint a second independent auditor
  3. CForm a separate sustainability committee of executives
  4. DIncrease the number of executive directors

Explanation

The Companies Act, 2013 requires specified classes of companies, including listed companies, to have at least one woman director. Listing regulations additionally require at least one woman independent director on the boards of the top listed entities. Appointing auditors, executives or executive committees does not satisfy the gender diversity requirement.

Did you get it right without looking?

One question tells you little. A timed set on Board's Accountability on ESG shows your real accuracy, how long you take and where you lose marks.

Practise Board's Accountability on ESGFree diagnostic mock

More Board's Accountability on ESG questions