Team Blitz India
Life Insurance Corporation (LIC) has put in place a framework for appointment of shareholders’ director in its Board. This framework — which has been introduced through a new regulation — comes eighteen months after the country’s largest life insurer came up with a mega Initial Public Offering (IPO) billed as the biggest float in the history of Indian primary market.
Besides Chairman Siddhartha Mohanty, the LIC Board has four Managing Directors, nine independent directors and one Government nominee director MP Tangirala.
The new framework provides that LIC shall elect — upon receiving a notice from not less than 1,000 shareholders or one-tenth of total number of shareholders, whichever is lower — a shareholders’ director through a general meeting of such shareholders, sources said.
A shareholders’ director would be appointed by the Board for four years and would be eligible for re-election and re-appointment for another four years, according to the new framework. Interestingly, the new framework stipulates that a person to be appointed as shareholders’ director cannot hold a similar position in more than two body corporates at the same time.
Also, the second body / corporate in which he has been appointed should not be in a business that is competing or in conflict with the business of LIC. The new framework provides that the shareholders’ director can also be considered as an independent director so long as certain conditions are met.
Also, a person elected as shareholders’ director would have to vacate his office on the day he ceases to be a shareholder, according to the new framework.
The Nomination and Remuneration Committee of the LIC Board has been tasked to carry out adequate duediligence for the appointment.
