Unlimited Attempts Allowed
In line with modern-day company governance laws, every company’s board should have at least 30% of directors as unbiased.
The logic is that these unbiased administrators should act as watchdogs of the business enterprise and test for wrongdoings.
However, realistic life is exclusive.
Often, while that agency is stuck in an economic crisis or gets investigated for fraud, business enterprise directors plead that they lack knowledge of the laws as an excuse to get away with the mess.
But now, not anymore.
PM Modi-led BJP Govt is now prepared to mandate exams for independent administrators.
This can exchange so many matters if performed properly.
Passing Exam Mandatory For Independent Directors
The Ministry of Corporate Affairs will introduce a new rule within the next two months. In keeping with the fact that independent directors of any enterprise might be required to bypass an exam, they are not eligible.
This examination can be part of their company literacy, and the questions would encompass Indian agency legal guidelines, ethics, and capital market norms.
This has been shown by Corporate Affairs Secretary Injeti Srinivas, who stated, “We need to demolish the myth that unbiased directors don’t have any fiduciary duty. We want to propagate company literacy to lead them to be aware of their duties, roles, and duties,”
The desirable news is that the applicants could be allowed limitless tries to bypass this examination and become independent directors.
Why Does This Examination Rule Make Sense?
As with organization laws, 30% of the organization’s board must be unbiased administrators. Hence, this new rule will immediately affect 30% of all directors in the company world.
A huge, massive exchange may be unleashed.
The want for this special corporate literacy examination was felt after the debacle at Infrastructure Leasing & Financial Services (IL&FS).
Deloitte Haskins Sells and KPMG affiliate BSR & Associates, auditing this public-private partnership company, made massive lapses, and the corporation administrators pleaded for lack of information about the whole affair.
Govt. Soon, Deloitte Haskins Sells and KPMG associate BSR & Associates can be banned for five years. However, just a ban doesn’t serve the motive.
If the Infrastructure Leasing & Financial Services administrators had acknowledged the basics of corporate governance, this case wouldn’t have arisen.
The proper execution of this proposed rule is vital and could sincerely make a difference.
We will keep you up to date as more information becomes available.
Since you landed here, I assume you have either successfully finished law school or will be graduating soon. Given the rigors you have endured, congratulations are certainly in order. But like me, after finishing law school, I am sure you are thinking, “Okay, I successfully jumped that hurdle. Now I need to jump the next and most important one—passing the Bar.”
Taking the Bar exam is much different than taking an exam in law school. Putting aside the logistics, time constraints, and two-day intensity, the Bar exam is put together by the state bar regulatory agencies to test whether a person would be a competent attorney. Thus, the exam differs in many ways from basedaonyou have been exposed to.