CII issued Guidelines for Independent Directors Appointment

On Monday, India Inc. was asked by the Confederation of Indian Industry (CII) to clearly delineate the post of Independent Directors and allow them to serve for a maximum of ten years, emphasising the crucial role the Independent Directors play in ethical decision-making, accountability, and the long-term success of organisations.

It also called on companies to view succession planning as a continuous and holistic process rather than an episodic event when it unveiled guidelines regarding the appointment of Independent Directors and the Board evaluation process. CII recommends that the management submit a detailed report to the Independent Directors on key developments in between two Board meetings.

According to the report, Independent Directors should be appointed for two five-year terms, depending on performance and the situation. The companies can also achieve long-term goals this way. There is no binding effect on any company based on the guidelines.

The CII guidelines emphasise diverse Board membership, including women. It also focuses on indemnifying Directors via insurance, providing compensation that matches their increased roles and responsibilities, and establishing a system for evaluating the Board. CII also emphasised that companies must overcome challenges that extend beyond borders, and the corporate governance framework should be flexible enough to respond to the global challenges it faces.