Executive Directors

This query is : Resolved

Parashar (Querist)
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11 April 2011 Hi all

A public company has appointed Mr. A as Exective Director-works & Operations but the co. dont wish to take him on the Board and does not file Form 32.

Is it possible, if not reasons therefore.

Jayashree S Iyer

Jayashree S Iyer (Expert)
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12 April 2011 Many companies designate their executives as ED, Director, Sr. Director, etc. without actually inducting them in the Board.

Such practices, no doubt, create confusion and are not healthy. I have even come accross a MCA circular restricting usage of such designation for the executives who are not on Board.

However, there is no statutory provision and hence the practice is continuing.

A person to be a "Director" must be appointed by the Board by way of a Resolution and his appointment has to be approved by the members in General Meeting. Form 32 needs to be filed.

Just designating an executive as ED will not make him a member of the Board.