Companies that do not appoint the requisite number of independent directors on their board by December 31, will be liable to pay heavy penalties, according to SEBI.

Keeping in view difficulties being faced by corporates, SEBI had earlier extended the last date to December 31 from the earlier deadline of April for compliance of having a requisite number of independent directors on company boards, as envisaged in Clause 49 of Listing Agreement.

Industry will need to find about 25,000 independent directors. However there is no bar on one person being on more than one board.

Note: Securities and Exchange Board of India (SEBI) has specified that not less than 50 per cent of the board of directors should consist of non-executive directors.

If the chairman of the board is a non-executive director, at least one-third of the board should consist of independent directors and in case he is an executive director, at least half of the board should comprise independent directors...Read more