Criteria for appointment of Directors
The Company recognizes that a committed, well-balanced Board creates a culture of
leadership to provide long-term vision, ensure governance as well as protect the
interest of all stakeholders.
The objectives of the Policy shall, inter-alia, include the following:
- To identify the key skills and expertise required on the board as a whole to support
the company’s strategic goals alongwith competency requirements to assess potential
incumbents;
- To define objective and transparent criteria of appointment of directors including
factors like qualifications, experience, skill sets, independence, diversity, and
alignment with Company values.
- To outline guiding principles for selection of suitable candidates for consideration
of Nomination and Remuneration Committee and the Board’s approval to fill the
vacant/newly created Board seats, which could also be subject to the receipt of
requisite approval/prior approval from the various statutory/ regulatory
authorities, as may be applicable;
- To ensure that the business of the Company is not affected on account of
interruptions caused due to superannuation or voluntary retirement or resignation or
death or any other event leading to permanent incapacitation or sudden exit of any
Member of the Board.
Induction Training for Newly Appointed Board Members
On appointment of the Board member, a joining kit containing the annual reports of the
Company for previous three years, Memorandum of Association and Articles of Association
of the Company, meeting calendar for the year, code of conduct policy, etc is handed
over along with the appointment letter to the newly appointment Board member.
The Company will arrange familiarization programme at its Corporate Office or at a
location as per the convenience of newly appointed Directors within 90 days of their
appointment on the business environment and overall operations of the Company. Induction
training will be imparted in form of structured presentation on different topics
important to the role and responsibilities at their position, which may include overall
view of the Company, strategic directions, core values including ethics, corporate
governance practices, details of the organization structure, product portfolio,
financial and operational performance updates of the Company.
The Company shall identify and facilitate trainings for the Directors. The Company shall
also arrange for further trainings on periodic basis to directors to ensure that they
are kept up to date and briefed about their liabilities in terms of various legislations
and the additional relationships with shareholders and regulators, on account of their
appointment as a member of the Board. Through this training sessions, the directors
shall be made aware of the governance framework of the Company i.e. matters to be
handled at Board level, Committees formed and their purpose The Directors shall be
provided with all necessary information as would enable him to function and discharge
his responsibilities as effectively as possible.
DIRECTOR QUALIFICATION CRITERIA AND INDEPENDENCE STANDARDS
The Nomination and Remuneration Committee shall evaluate each candidate under the
Director Qualification Criteria set forth herein.
Director Qualification - General Criteria
The Board has not established specific minimum age, education, years of business
experience or specific types of skills for Board members, but, in general, expects
qualified directors to have ample experience and a proven record of professional
success, leadership and the highest level of personal and professional ethics, integrity
and values.
In its evaluation, the Committee shall consider the Board size and composition of the
Board to ensure that the Board will maintain a good number of directors who qualify as
“independent” pursuant to t h e applicable Law and rules.
While considering the appointment of a Director nominated by Shareholders, the Committee
and the Board should ensure that the candidate is in the whole time employment of the
Organisation/ institution represented by him. However, such criteria will not apply to
the RBI Nominee. It should also be ensured that the proposed director candidate has
atleast two years of residual service in their respective organisation.
The Committee shall also consider whether each director candidate and each director
possesses the following:
- The highest level of personal and professional ethics, reputation, integrity and
values; An appreciation of the Company’s mission and purpose, and loyalty to the
interests of the Company and its shareholders;
- The ability to exercise objectivity and independence in making informed business
decisions;
- The willingness and commitment to devote the extensive time necessary to fulfill
his/her duties;
- The ability to communicate effectively and collaborate with other Board members to
contribute effectively to the diversity of perspectives that enhances Board and
Committee deliberations, including a willingness to listen and respect the views of
others; and
- The skills, knowledge and expertise relevant to the Company’s business, with
extensive experience at a senior leadership level in a comparable company or
organization, including, but not limited to relevant experience in international
operations, public service, finance, accounting, strategic planning, technology and
marketing.
Director’s Disqualifications
A person shall not be eligible for appointment as a director of a company, if -
- he is of unsound mind and stands so declared by a competent court;
- he is an undischarged insolvent;
- he has applied to be adjudicated as an insolvent and his application is pending;he
has been convicted by a court of any offence, whether involving moral turpitude or
otherwise, and sentenced in respect thereof to imprisonment for not less than six
months and a period of five years has not elapsed from the date of expiry of the
sentence:
Provided that if a person has been convicted of any offence and sentenced in respect
thereof to imprisonment for a period of seven years or more, he shall not be eligible to
be appointed as a director in any company;
- an order disqualifying him for appointment as a director has been passed by a court
or Tribunal and the order is in force;
- he has not paid any calls in respect of any shares of the company held by him,
whether alone or jointly with others, and six months have elapsed from the last day
fixed for the payment of the call;
- he has not paid any calls in respect of any shares of the company held by him,
whether alone or jointly with others, and six months have elapsed from the last day
fixed for the payment of the call;
- he has been convicted of the offence dealing with related party transactions at any
time during the last preceding five years; or
- he has not been allotted the Director Identification Number
No person who is or has been a director of a company who -
- No person who is or has been a director of a company who -
- has failed to repay the deposits accepted by it or pay interest thereon or to redeem
any debentures on the due date or pay interest due thereon or pay any dividend
declared and such failure to pay or redeem continues for one year or more, shall be
eligible to be re-appointed as a director of that company or appointed in other
company for a period of five years from the date on which the said company fails to
do so.
The Committee shall also consider its policies with respect to retirement age, change in
employment status, as well as all other relevant facts and circumstances in making its
recommendations to the Board.
Formal appointment of Independent Directors
The appointment of independent directors shall be formalized through a letter of
appointment, which shall set out:
- the term of appointment;
- the expectation of the Board from the appointed director; the Board-level Committee
in which the director is expected to serve and its tasks;
- the fiduciary duties that come with such an appointment along with accompanying
liabilities;
- provision for Directors and Officers (D and O) insurance, if any;
- the Code of Business Ethics that the company expects its directors and employees to
follow;
- the list of actions that a director should not do while functioning as such in the
company; and
- the remuneration, mentioning periodic fees, reimbursement of expenses for
participation in the Boards and other meetings and profit related commission, if
any.
Tenure of appointment of independent director
RBI has laid down a governance framework for NPCI, which incudes, that none of the
Chairman/Director/Nominee Director shall hold office for a period of more than 5 years
in NPCI. Accordingly, Independent Directors are appointed for a period of three years at
a time (first term) and thereafter they are eligible for an extension or re-appointment
for second term of 2 years, subject to the approval of the NRC, Board and shareholders
of the Company.
Tenure of appointment of independent director
Independent Directors would have the option and freedom to meet company management
periodically to enable them to study and analyze various information and data provided
by the Company management.
Independent Directors may also meet separately to discuss the issues pertaining to the
Company on a regular basis.
- The independent directors of the company shall hold at least one meeting in a year,
without the attendance of non-independent directors and members of management;
- All the independent directors of the company shall strive to be present at such
meeting;
- The meeting shall:
- review the performance of non-independent directors and the Board as a
whole;
- review the performance of the Chairperson of the company, taking into
account the views of executive directors and non-executive directors;
- assess the quality, quantity and timeliness of flow of information between
the company management and the Board that is necessary for the Board to
effectively and reasonably perform their duties.
Woman Director
There would always be at least one woman director on the Board of the Company.
Performance evaluation of Independent Directors and the
Board of Directors on an annual basis
- The performance evaluation of independent directors shall be done by the entire
Board of Directors, excluding the director being evaluated.
- On the basis of the report of performance evaluation, it shall be determined whether
to extend or continue the term of appointment of the independent director.
Individual Director Independence Determinations
All determinations of independence shall be made on a case-by-case basis for each
director after consideration of all the relevant facts and circumstances and the
standards set forth herein. The Board reserves the right to determine that any director
is not independent even if he or she satisfies the criteria.
Declaration of Independence
Every independent director shall at the first meeting of the Board in which he
participates as a director and thereafter at the first meeting of the Board in every
financial year or whenever there is any change in the circumstances which may affect his
status as an independent director, give a declaration that he meets the criteria of
independence.
Notice of Change of Circumstances
Each director to be appointed as an Independent Director, has an affirmative obligation
to notify the Company of any change in circumstances that may put his or her
independence at issue. If so notified, the Committee shall re- evaluate such director’s
independence, as promptly as practicable, and make a recommendation to the Board with
respect to such director’s independence.
