The Companies Act, 2013 has made it mandatory for every public company having:
- Paid-up capital of Rs. 10 crore or more or
- Turnover of Rs. 100 crore or more or
- Outstanding loans/borrowings in excess of Rs. 50 crore or more
to have at least two Independent Directors. In addition, every listed company need to have at least one-third of total number of directors as Independent Directors.
Since Independent Directors cannot be from the promoter group and generally cannot have a pecuniary relationship with the company, it is expected that this would enable them to be objective and act in the interest of the company and all the stakeholders without any self-interest.
The Companies Act, 2013 provides for the maintenance of a databank of containing names, addresses and qualifications of persons who are eligible and willing to act as Independent Directors, maintained by any body, institute or association, as may be notified by the Central Government, having expertise in creation and maintenance of such data bank and put on their website for the use by the company making the appointment of such directors. The responsibility of exercising due diligence before selecting a person from such databank would rest with the company.
Independent Directors are also required to meet and review the performance of non-independent directors and board as a whole.
Keeping all this in mind, we felt that there was an urgent and strong need of a body who can not only help the corporate in identifying the right mix of Independent Directors but can also help them in ensuring highest standard of corporate governance.
Hence this thought has resulted into the birth of AID-India. The AID-India was officially incorporated on October 1,2014 as a Trust under the Indian Trust Act 1882. It has been set up primarily to advance corporate governance in India by establishing a professional forum and network for directors and managers within the public and private sectors.