Committees under the Board of Directors
There are various committees under the Board of Directors, some of them are as follows.
1. Audit Committee
- Section 177 of the Companies Act, 2013 explains the function and need for an audit committee in a listed company. It is essential according to the Companies Act, 2013 that every listed company and a set of companies must have an audit committee.
- The act specifies that the committee must contain a minimum of 3 members.
- An independent director shall be the chairman of the audit committee.
- The total number of independent directors must be equal to or more than two-thirds of the total directors in the committee.
- The act also specifies that at least one of the members should be well versed in the field of audit and finance and all the members should have some knowledge of finance.
2. Nomination and Remuneration Committee
- Section 178 of the Companies Act, 2013 explains the function and need for a Nomination and Remuneration Committee in a listed company.
- As per this section, this committee shall have a minimum of three directors.
- The number of directors must be equal to or more than 50% of the total number of members.
- The director of this committee shall be an independent director.
3. Stakeholders Relationship Committee
- This committee is mainly responsible for resolving any grievances that the security holders of the company might have.
- In a listed company the role of security holders is very important and because of that this committee is created.
- This committee looks into various aspects of the interests of the shareholders and their well-being.
- They resolve any issues present while ensuring to maintain a good relationship between the shareholders and the company.
- As per the act, a non-executive director is the chairperson of this committee.
4. Corporate Social Responsibility Committee
- Every company that comes under the purview of the CSR provision of the Companies Act 2013 must constitute a Corporate Social Responsibility Committee in their company.
- The number of directors in this committee must be equal to or more than three and it must consist of one independent director.
- In case any private company has only two directors and it falls under the CSR purview of the act then it can make its CSR committee with two directors.