All independent directors will soon take an “online self-assessment skills test”; IICA Manesar will maintain a database
New Delhi, October 23 (KNNNow, all independent directors will soon have to pass an “online skills self-assessment test” before being appointed to boards, according to a company law amendment notified by the MCA on Tuesday. This rule will come into effect from December.
IICA Manesar will conduct this review. It will also create and maintain a database with the names, addresses and qualifications of persons eligible to be appointed independent directors of companies.
The Ministry of Corporate Affairs has notified the Indian Institute of Corporate Affairs (IICA) in Manesar in Haryana as an institute to create and maintain a database containing the names, addresses and qualifications of persons who are eligible and willing to act as independent directors.
This will be for the use of the company appointing these directors.
This notification will come into effect on December 1, 2019.
Company boards will have to disclose the results of these tests in their annual reports. The government inserted a new clause in the Companies (Accounts) Rules 2014, sub-rule 5; it will require companies to file such a declaration.
The MCA notification highlights:
— The Indian Institute of Corporate Affairs, based in Manesar, will conduct the review.
— It will create and maintain a database with the names, addresses and qualifications of the persons eligible to be appointed independent directors for companies.
— Company boards will have to disclose the results of these tests in their annual reports.