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Which of the following statements about independent directors of a listed public company under section 149 of the Companies Act, 2013 are correct? At least one-third of the total number of directors…

Question and options

Which of the following statements about independent directors of a listed public company under section 149 of the Companies Act, 2013 are correct?

  1. At least one-third of the total number of directors must be independent directors.
  2. An independent director may be granted stock options if the members approve them by special resolution.
  3. An independent director may receive profit-related commission if the members approve it.

  1. Statements 1 and 2 only

  2. Statements 1 and 3 only

  3. Statement 1 only

  4. Statements 1, 2 and 3

Answer and explanation

Correct answer: B - Statements 1 and 3 only

Section 149(4) of the Companies Act, 2013 requires every listed public company to have at least one-third of its directors as independent directors. Section 149(9) bars stock options for an independent director, with no exception for member approval, but allows sitting fees, reimbursement of expenses and profit-related commission approved by the members. Statement 2 is therefore wrong and statement 3 right.

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