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Role of independent directors in corporate governance

This article is written by Sudhi Ranjan Bagri and further updated by Pruthvi Ramakanta Hegde. This article covers independent directors, meaning, appointment, and need of an independent director. Further covers corporate governance and its meaning and the role of independent directors in corporate governance.

Introduction 

Directors play a very important role in the company’s success. There are many types of directors in a company, among which independent directors act like guardians within a company. Normally, they are not involved in day-to-day operations and do not have close ties to the company’s management. Instead, their job is to ensure that the company is running properly, fairly, and ethically. Different categories of independent directors belonging to different backgrounds and holding varied expertise is beneficial to the company. It helps the company to make better decisions because they consider different points of view. Moreover, independent directors are like most trusted advisors in a company. They do not have any personal interests at stake. They also help in making decisions by considering the interests of everyone.

History of emergence of the concept of independent directors

The idea of independent directors emerged as part of the evolution of corporate governance. In 1999, the Securities and Exchange Board of India (SEBI) formed a committee led by Kumar Mangalam Birla to improve corporate governance standards. Their recommendations led to the inclusion of Clause 49 in the Listing Agreement in 2000, which dealt with corporate governance.

According to the committee, independent directors are those who, apart from their director’s pay, do not have any significant financial relationship with the company, its management, or its subsidiaries that could affect their judgement.

After huge scams like Enron and WorldCom, governments around the world, including India, realised that they needed stronger rules to ensure that the companies functioned in an honest and responsible manner. Therefore, in 2002, the Indian Government set up a committee led by Mr. Naresh Chandra to suggest improvements. One important suggestion was about independent directors. 

In 2002, another significant development took place when SEBI formed a committee chaired by N.R. Narayana Murthy to review the extent to which the listed companies were following corporate governance practices. As a result, the committee made changes to Clause 49 of the Listing Agreement, which outlines corporate governance standards for listed companies. One of the key revisions was to include the updated definition of an independent director. The main aim of this change is that independent directors must be truly independent so that they could act in the best interests of the company without being influenced by the company’s management or other parties. Revised Clause 49 also defines an “independent director” as a non-executive director of the company who meets the following criteria:

  • They do not have any significant financial interest in a company which includes its owners, its directors, its top managers, or its affiliated companies, that might affect their independence.
  • They are not related to the company’s owners or people in high-ranking management positions.
  • They have not been an employee of the company in the last three financial years.
  • In the last three years, they have not been a partner or an employee of certain firms that have a close relationship with the company, such as audit firms, legal firms, or consulting firms.

In India, before 2004, independent directors had to be at least 21 years old according to the rules set by SEBI. Then, in January 2013, SEBI suggested some new rules to make companies run better, which were supposed to start in October 2014. The Companies Bill of 2009, later the Companies Act of 2013, introduced detailed guidelines for independent directors, including a specific “Code for Independent Directors” in Schedule IV.

In India, the Companies Act of 2013 introduced provisions for independent directors, inspired by international best practices like those outlined in the Sarbanes-Oxley Act (SOX). Corporate scandals such as Enron and WorldCom, emphasised the significance of independent directors on corporate boards in the US. Accordingly, SOX was enacted in 2002 in the United States. These directors provide unbiased advice, enhance transparency, and contribute to the credibility of a company’s governance. Additionally, SOX mandated that the majority of members on audit committees within companies must be independent directors. These independent directors are not directly tied to the company’s management. This requirement ensures that the audit committee can effectively scrutinise financial reports, and can maintain transparency and accuracy in financial reporting, thereby enhancing investor confidence and trust in the company’s operations. Similarly, Clause 49 of the Indian Companies Act specifically addresses the role of independent directors. It mandates that listed public companies must have at least one-third of their directors as independent directors and also specifies the composition of audit committees based on the presence or absence of an Executive Chairman. A comparative analysis reveals certain similarities between SOX and Clause 49. For example, both of them say companies should have independent directors. These are people on the company’s board who are not tied too closely to the company’s management. They are like referees, making sure everything is fair.

Who is an independent director

Under Section 149(6) of the Companies Act, 2013, independent director means someone who:

  • Is considered by the Board to be a person of integrity with relevant expertise and experience.
  • Is not a promoter of the company, its parent, subsidiary, or associated companies.
  • Is not related to the promoters or directors of the company or its related entities.
  • Does not have any financial relationship with the company, its parent, subsidiary, or associated companies, or their promoters or directors for the past two financial years or the current financial year.
  • Does not have any relatives with significant financial dealings with the company or its related entities.
  • Has not been part of the company’s management or employed by the company, its parent, subsidiary, or associated companies in the past three financial years.
  • Has not been associated with certain professional firms (like auditors, company secretaries, legal, or consulting firms) that have had significant transactions with the company.
  • Does not hold a significant portion of voting power in the company either individually or with relatives.
  • Is not a Chief Executive or director of a nonprofit organisation that receives a significant portion of its funds from the company or its related entities.
  • Possesses any other qualifications as may be prescribed by law.

Appointment of independent directors

  • The appointment process of independent directors is governed as per Section 149(6) of the Companies Act, 2013, along with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014, and Regulation 25 of the Securities Exchange Board of India (Listing and Obligations Disclosure) Regulations 2015, It includes:
    • The board must trust that the person is reliable and has the right skills and experience.
    • The individual must not be the promoter of the company or have close family ties with the promoter. They also should not have close relationships with current directors.
    • They should not have done any financial transactions with the company or its leaders recently, nor should their family members have.
    • The person or their family should not have held certain important roles in the company in the past few years, or worked for specific auditing or consulting firms that significantly dealt with the company. 
    • They should not have significant ownership in the company’s shares or lead a non-profit heavily reliant on the company’s funding.
    • They should also meet any other qualifications that may be required by law.
  • Independent directors should have the right skills and knowledge in areas like finance, law, management, sales, marketing, and more, relevant to the company’s business as per Rule 5 of the Companies (Appointment of Directors) Rules, 2014. The Ministry of Corporate Affairs clarified the concept of a ‘Pecuniary Relationship’ for independent directors under the Companies Act. If a company does business with an independent director and pays them a fair amount, just like it would with anyone else, then that director is not seen as having a financial connection with the company. Transactions like getting paid for attending board meetings or being reimbursed for expenses are not considered financial relationships. Independent directors can also earn commission as part of their pay for being a director without it being seen as a ‘Pecuniary Relationship’.
  • The government and certain groups keep a list of qualified people (databanks) who could be independent directors. This list has information like their background, education, work experience, and any legal issues they might have. If someone wants to be an independent director, they can apply to be on this list. However, companies should still check and research before picking someone from this list. The list is available online, so companies can easily find potential candidates. 
  • Additionally, there is a platform called the Independent Directors Repository, supported by professional groups and the government. It helps to connect eligible individuals with companies looking for independent directors.
  • One needs to approach the potential director to give written consent using Form DIR-2, and sign a declaration in Form DIR-8, confirming that they are not disqualified to be a director under the Act. Lastly, they must disclose any conflicts of interest using Form MBP-1. 
  • Other procedures
    • Nomination and Remuneration Committee (NRC): If required by law, the NRC recommends a candidate for independent director to the company’s Board of Directors.
    • Board meeting: The Board sends notices to its members and holds a meeting to discuss appointing an independent director. They decide on the director’s term, review potential conflicts of interest, and authorise someone to file necessary paperwork.
    • Shareholder approval: Within 30 days of the Board meeting, a general meeting of shareholders is held to approve the appointment through a special resolution. After approval, the company files Form DIR-12 with the Registrar of Companies (ROC).
    • Disclosure requirements: The company must promptly disclose the appointment to the stock exchange and its website. Details of the general meeting proceedings and voting results must also be submitted to the stock exchange.
    • Appointment letter: An appointment letter is issued to the newly appointed independent director, outlining their roles, responsibilities and compensation.
    • Insider trading disclosure: The company obtains a disclosure form related to insider trading from the director within 7 days of their appointment.
    • Statutory register: The company maintains necessary registers, including those of directors and key management personnel (KMP), and registers of contracts or arrangements in which directors have interests.

Number of independent directors on the Board

As per the Companies Act, 2013, specific requirements are set for the appointment of Independent Directors:

  • For listed public companies: At least one-third of the total directors should be independent directors, as per Section 149(4).
  • For certain other public companies:Rule 4 of the Companies (Appointment & Qualification of Directors) Rules, 2014 mandates that companies meeting certain criteria must have at least two independent directors. These criteria include:
    • Public companies with a paid-up share capital of Rs. 10 crore or more,
    • Public companies with a turnover of Rs. 100 crore or more, or
    • Public companies with outstanding loans, debentures, and deposits exceeding Rs. 50 crore, in aggregate. 

Letter of appointment for independent directors

The appointment of independent directors should be formalised through a letter of appointment, which should include the following details:

  • Term of appointment: This specifies the duration for which the independent director has been appointed.
  • Expectations from the director: The letter should outline the expectations of the board and specify the board-level committees in which the director is expected to serve, along with their respective tasks.
  • Fiduciary duties and liabilities: It should clarify the fiduciary duties and liabilities associated with the appointment.
  • Code of business ethics: The company’s expectations regarding the code of business ethics that directors and employees are required to follow.
  • List of prohibited actions: The letter should include a list of actions that a director should refrain from while serving in the company.
  • Remuneration: Details about remuneration, periodic fees, reimbursements for participating in board and other meetings, and any profit-related commission should be mentioned.
  • Directors & officers insurance: Provision for directors & officers insurance, if applicable, should be addressed.

The terms and conditions of appointment of independent directors should be available for inspection at the company’s registered office during business hours and should also be posted on the company’s website. Additionally, the Letter of Appointment along with detailed profiles of independent directors must be disclosed on the company’s website and the stock exchanges, within one working day from the date of appointment. These measures ensure transparency and accountability in the appointment process of independent directors, fostering good corporate governance practices.

Need for independent directors in a company

Having independent directors in a company is important for various reasons. They help keep an eye on what is happening inside the company and can alert shareholders and the public if there is any wrongdoing or mismanagement. They also help to solve mistakes made by the management team and make sure the company follows the rules and acts fairly. Lastly, they also help make decisions that may affect the company’s future.

What is corporate governance

Corporate governance is like a set of rules and guidelines that companies follow to make sure they behave properly. The board of directors is really important in making sure this happens. Other important players are proxy advisors (people who advise on voting in company decisions) and shareholders (the people who own parts of the company). Companies often talk about their corporate governance to show they are doing things right. Having good corporate governance is important for companies as it helps in ensuring transparency and accountability. When a company has good corporate governance, it can be easier for them to get money from investors. For example, Apple Inc. talks about its leaders and provides information about how they make decisions.

Independent directors and corporate governance:

Independent directors are important because they are expected to be impartial to the company’s management, and they will act in the best interests of the shareholders. They need to know what is happening within the company and speak up when needed. Their role is outlined in a set of rules mentioned under Schedule IV of the Companies Act, 2013. These rules explain what independent directors should do such as protecting the interests of all stakeholders. In the case of minority shareholders, these directors resolve conflicts of interest, evaluate how well the management is doing, and help out in disputes between management and shareholders. Independent directors also need to attend company meetings and stay informed about what is going on in the company.

Participation in board meetings

Section 173(2) of the Companies Act, 2013 says that directors can join board meetings either in person or through video conferencing or similar methods. These methods must be able to record who participated and store what was discussed in the meeting, including the date and time. However, the government can specify certain topics that cannot be discussed in meetings held through video conferencing or similar methods.

Board committees and independent directors

The Companies Act of 2013 requires certain committees to include independent directors, as outlined below:

Corporate Social Responsibility (CSR) Committee:

Section 135 of the Act mandates that companies meeting specific financial thresholds must constitute a CSR committee. This committee must consist of three or more directors, with at least one being an independent director. However, private or unlisted public companies are not obligated to appoint independent directors, and only two directors may form the CSR committee.

As per Companies (Corporate Social Responsibility Policy) Rules, 2014, foreign companies must form a CSR committee with at least two persons, one specified under Section 380(1)(d) and another nominated by the company. A person specified under 380(1)(d) is a person residing in India who has been authorised to accept legal documents on behalf of the company.

Nomination and Remuneration Committee

The Companies Act of 2013 requires certain companies to establish a Nomination and Remuneration Committee (NRC). Section 178 mandates every listed company and certain prescribed companies to form an NRC. The committee must consist of three or more non-executive directors, with at least one-half being independent directors. The chairman of the company, whether executive or non-executive, cannot preside over the NRC but can be a member. The chairman of the NRC must be an independent director.

Role of independent directors

Independent directors have a variety of roles to fulfil in their official capacity. Some of these major roles are :

Towards shareholders and stakeholders

Independent directors make sure that the company’s operations are transparent and clear. They especially guide shareholders with their expertise. When the company’s management or Board makes decisions that could harm shareholders, creditors, or employees, independent directors help to protect their interests. They also keep an eye on deals between the company and related parties and they support mechanisms like whistleblower policies that help expose any wrongdoing, all to safeguard stakeholders’ interests.

Towards the board

The independent director must check that all those concerns that are important for the company are properly addressed by the board of directors. The objectives and duties of the independent directors are the same as those of the executive directors. However, as compared to the executive directors, the time that is needed to be devoted by the independent director and the degree of skill and care required for the company, are much lesser.

Responsibilities of independent directors towards a good corporate governance

The responsibilities of an independent director are important. As a member of the Board, their responsibilities are very much similar to any other director of the Board. In the risk management committee, independent directors will assist in searching for problems that could affect the company and find ways to handle it. They need to give their thoughts and use their knowledge to understand these problems better without being biassed towards any side. Further, independent directors need to keep communication between the company and its stakeholders honest, which helps to build trust and credibility in the eyes of the public. In this way, independent directors play a vital role in a company. To exemplify, after the financial crisis in 2008, companies like JP Morgan, added more of these guardians to watch things more closely. These directors also advise because they know a lot about business. Another example would be that of Sheryl Sandberg who helped Walt Disney with its plans for the internet and digital strategies. 

Another important job of the independent directors is to make sure that the company does what is best for itself and the entities who own it (shareholders). Sometimes, it also includes making tough decisions. A good independent director usually has worked in business for a long time and knows a lot. They have to be honest, have their own opinions, and must not be influenced by others too much. Susan Decker is a good example of a strong independent director. She worked at big companies like Yahoo! and Berkshire Hathaway. When she joined Intel’s board, she brought a lot of experience and helped the company to make good decisions.

Duties and conduct of an independent director 

The independent directors have many duties. Section 166 of the Companies Act, 2013 consists of the following duties for every director including independent directors. It includes the following:

  • Directors must follow the rules and guidelines set out in the company’s articles of association.
  • Directors should make decisions that benefit the company’s goals and the interests of its members (shareholders), employees, and the community, as well as protect the environment. They should always act honestly and with integrity.
  • Directors must perform their duties with care, skill, and diligence expected from someone in their position. They should make informed decisions and take reasonable steps to understand the company’s operations and challenges.
  • Directors should avoid situations where their interests conflict with the interests of the company. They should not use their position for personal gain or advantage, and if they do, they must repay any undue gain to the company.
  • Directors cannot transfer their roles to someone else. Any attempt to do so is invalid.
  • As per Section 166 (7) of the Companies Act 2013, if a director breaches any of these duties under this Section, they can be fined between one lakh rupees to five lakh rupees.

In essence, directors are responsible for acting honestly, and in the best interests of the company and its stakeholders. Some of the general duties and conduct of such independent directors include:

  • Independent directors need to uphold ethical standards by being honest in every situation.
  • They need to act constructively and objectively while performing their responsibilities. 
  • They need to make decisions that help the company grow by spending time understanding issues to make good decisions. Further decisions must be made based on what is best for the company, and not based on personal or any other interests.
  • Understand the company and its operations by undergoing training and staying updated.
  • Try to attend the company’s general meetings and meetings with the board of directors and its committees.
  • Have enough knowledge about the company and the industry it operates in.
  • Inform the company if they notice any unethical behaviour, fraud, or violations of the company’s rules.
  • Use their authority to safeguard the interests of the company, its shareholders, and its employees.
  • Avoid blocking the company’s progress or the work of the board committees.
  • Be involved in the board’s committees as a chairperson or member.
  • They must not share confidential information unless the board approves or the law requires it.
  • Make sure there is a way for people to report issues without facing negative consequences.
  • Independent directors are part of different committees of the company. Similarly, they share unbiased opinions because they are not part of the company’s management team.

Remuneration of independent directors

Independent directors can only receive payment for attending meetings, according to the Companies Act. They are not allowed to get stock options or any other forms of payment unless approved by shareholders. The Nomination and Remuneration Committee, as required by the Companies Act, needs to create a policy for how directors are paid, and this policy must be disclosed in the company’s report. Additionally, under the revised clause 49 II.C of the Listing Agreement, pay for non-executive directors, including independent directors has to be decided by the Board of Directors and approved by shareholders in a general meeting.

Tenure of independent director

According to Section 149(10) of the Companies Act 2013, an independent director can work for a maximum of consecutive five years but is subject to Section 152 of the Companies Act 2013. If the company wants to extend their tenure, they must pass a special resolution, and it should be mentioned in the Board’s Report. According to Section 149(11), independent directors can serve for a maximum of two consecutive terms, each lasting up to five years. After completing these two terms, they must take a break for three years before becoming eligible for reappointment. During this break, they cannot have any direct or indirect connections with the company.

However, the Ministry of Corporate Affairs issued a circular in 2014 that clarified about the appointment and tenure of independent directors through a circular in 2014. When an independent director is appointed for any term, whether it is for five years or less, it counts as one term. Even if they serve for less than 10 years in two consecutive terms, they must step down after two terms. After completing consecutive terms of less than 10 years, they can be reappointed only after a cooling-off period of 3 years.

Retirement by rotation

Section 149(13) of the Companies Act, 2013 states that the rules regarding the retirement of directors by rotation, as outlined in Section 152(6) and Section 152(7) of the Companies Act, do not apply to the appointment of independent directors. Thus independent directors are not required to retire by rotation. 

Liability of an independent director

Under Section 149(12) of the Company Act of 2013, the liabilities of the independent directors have been considered limited. Accordingly, this Section states that independent directors and non-executive directors, excluding promoters or key managerial personnel, will only be held accountable for specific actions or inactions of the company if:

  • They were aware of these actions or inactions.
  • These actions or inactions were a result of established Board processes.
  • They provided consent or were complicit in these actions or inactions.
  • They did not act diligently to prevent these actions or inactions. 

In Sunil Bharti Mittal vs. CBI Case (2015), the Honourable Supreme Court clarified that directors can be held responsible for the company’s actions if there is strong evidence showing they were actively involved and had bad intentions, or if specific laws say they are responsible.

Along with this, if an independent director is found liable for breach of duties, they may face civil consequences also, such as:

  • They may be required to compensate the company or affected parties for any losses incurred as a result of their breach of duties.
  • They may be subject to legal action brought by the company, shareholders, or regulatory authorities, which could result in financial penalties or other remedies.
  • In severe cases, if an independent director is found to have engaged in serious misconduct or repeated breaches of duties, they may be disqualified from serving as a director of other companies for a specified period.

The specific punishment, if any, would be determined by the relevant legal proceedings or regulatory actions initiated against the director.

Companies which are not required to appoint independent directors

Certain types of unlisted public companies are exempt from appointing independent directors as per the Companies (Appointment and Qualification of Directors) Rules, 2014. These exemptions apply to:

  • Joint ventures: Companies formed through a partnership between two or more entities.
  • Wholly-owned subsidiaries: Companies entirely owned by another company, known as the parent company.
  • Dormant companies: Companies that are inactive and not engaged in any significant business activities, as defined under Section 455 of the Companies Act.
  • Section 8 companies and specified IFSC public companies: These are not required to appoint independent directors. This exemption was granted by the Ministry of Corporate Affairs through notifications issued on June 5, 2015, for section 8 companies and on January 4, 2017, for specified IFSC public companies. As a result, the rules and requirements regarding independent directors, including their definition and other related provisions, do not apply to these types of companies.

However, if any of these exempted companies are required to appoint a higher number of independent directors due to the composition of their audit committee, they must comply with this requirement. If an exempted company no longer meets the criteria for exemption (joint venture, wholly-owned subsidiary, or dormant status) for three consecutive years, it must then comply with the provisions regarding the appointment of independent directors until it meets one of the exemption criteria again.

Challenges faced by independent directors

Independent directors face many challenges that can make their jobs difficult in Indian companies. Some of the major challenges include:

  • Sometimes, independent directors might feel pushed by other people in the company to put their interests first, rather than focusing on what is best for the company and its stakeholders.
  • Independent directors might not have enough authority to make important decisions or bring about needed changes in the company. It can also be hard for them to get others to listen to their ideas and suggestions.
  • Independent directors might not know enough about the company’s operations, its industry, or the markets it is in. This makes it tough for them to spot and deal with problems related to how the company is run.
  • Independent directors might need more help, like money, time, and assistance, to do their job well. They might also need help getting the information they need to make good decisions.

Are Indian independent directors really independent

In Indian companies, there is a question about whether independent directors who are supposed to be independent are really independent or not.  Independent directors should be free from any strong financial ties to the company. But often, the people already on the board and the big owners of the company are involved in choosing them. This might mean they are not completely independent and might lean towards the company’s interests. Promoters of most of the companies exert significant control as they own a substantial number of shares. This can affect who gets picked for the board. Even though other shareholders have the right, the promoters might have more power and pick directors who agree with them. Independent directors might worry about not getting picked again when their term ends. This fear could stop them from disagreeing with the owners, making it hard for them to truly act independently. Even though rules try to make sure directors are independent, the way they are picked and the power of owners can make it tough for them to be truly independent.

How can we enhance powers of an independent director 

An Independent director’s power can be enhanced by approaching the following ways, that include:

  • It is important to regularly check if independent directors are still truly independent. This means looking into their connections with the company from time to time to make sure they are not too close.
  • Independent directors should also listen to what employees and customers have to say about the company. 
  • Companies should try to have a mix of different people on their boards, including independent directors. 
  • Whistleblowers are people who report when something seems fishy in a company. Independent directors should encourage whistleblowers to come forward if they notice any wrongdoing. This helps keep the company ensuring honest practices.
  • Companies should regularly review how well their independent directors are doing their jobs by looking at their performance and how well they work with others.

Best practice for handling independent directors in a company 

  • While selecting independent directors one needs to cross-check their skills. These directors should be skilled and have experience, and they shouldn’t be too close to the company’s leaders. It is also good to have a mix of people with different backgrounds and genders, so they can bring in fresh ideas.
  • Training for the directors will also help them to perform their functions better. They should stay updated on the best ways to manage a company. This might involve attending workshops or talking to experts to learn about new trends and risks.
  • Making an environment where independent directors feel safe to raise a concern if they see something wrong. Companies should provide ways for directors to report problems, and also ensure those issues get fixed.

Conclusion

Independent directors play an important role in corporate governance. The Companies Act 2013, confers powers on the Independent Director for the fair and smooth functioning of the Board of Directors and the company itself. These directors always act impartially; this will ensure that the company follows the rules and maintains its integrity. They are not involved in daily operations but help in making crucial decisions. Their role emerged to improve corporate governance after scandals like Enron. They are unbiased advisors who ensure companies follow rules, act in shareholder’s interests, and maintain transparency. Their appointment follows strict criteria to ensure they are truly independent. Lastly, it can be safe to conclude that they play a crucial role in risk management, communication with stakeholders, and decision-making by acting honestly, objectively, and in the company’s best interests. 

Frequently Asked Questions (FAQs)

Who approves the independent director’s appointment?

The appointment of independent directors is approved by the company in a general meeting.

Can a practising company secretary be appointed as an independent director?

Yes, an Independent Director is a Non-executive Director, and as such, a practising Company Secretary can indeed be appointed as an Independent Director.

Can an independent director of a Company also serve as an independent director of its holding, subsidiary, or associate company?

Yes, an independent director of a company can also serve as an independent director of its associate. Additionally, according to the revised clause 49 of the listing agreement, at least one independent director on the Board of Directors of the holding company must also be a director on the Board of Directors of a significant non-listed Indian subsidiary company.

Can an independent director serve more than two consecutive terms, even if they do not complete a total term of ten years?

No, an independent director cannot be appointed for more than two consecutive terms. However, an independent director can be reappointed after a period of three years from the cessation of their previous term. During these three years, they cannot be appointed in or be associated with the company in any other capacity, either directly or indirectly.

Can independent directors have any financial interests in the company?

Independent directors must not have any material financial interests in the company, however, they are eligible to receive remuneration in the form of sitting fees.

Is there a limit on the number of independent directorships a person can hold at a point? 

Yes, according to the Companies Act, 2013 in India, there is a limit on the number of independent directorships a person can hold at a point in time. As per Section 165 of the Companies Act, 2013, a person can hold a maximum of 20 directorships in total, which includes both independent and non-independent directorships. However, specific provisions regarding the maximum number of independent directorships are not explicitly mentioned in the Act. 

References

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