Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights

Vindhya Textiles Ltd has 1,450 security holders, including debenture-holders and deposit-holders, at points during the financial year. Its board wants to know who must chair the committee that considers and resolves security holder grievances. Under the Companies Act, 2013, the chairperson of the Stakeholders Relationship Committee must be:

The chairperson of the Stakeholders Relationship Committee must be a non-executive director. Section 178(5) fixes this requirement and leaves the remaining members to the Board. An executive director such as the Managing Director, or a Company Secretary, cannot chair it.

  1. AAn independent woman director only
  2. BA non-executive directorCorrect
  3. CThe Managing Director
  4. DThe Company Secretary

Explanation

Section 178(5) requires the Stakeholders Relationship Committee to have a chairperson who is a non-executive director, with other members decided by the Board. The Managing Director is an executive director, so he cannot chair it. The Act does not require the chair to be independent or a woman.

Did you get it right without looking?

One question tells you little. A timed set on Stakeholders Rights shows your real accuracy, how long you take and where you lose marks.

Practise Stakeholders RightsFree diagnostic mock

More Stakeholders Rights questions