‘Defining independent director is a new issue’

NEW DELHI: To make independent directors truly independent, president of Institute of Directors (IoD) Madhav Mehra suggested that besides selection, the fees and allowances given to such directors should be paid by an independent organisation formed by the Securities and Exchange Board of India (Sebi).

Under the clause 49, Sebi, from the January 1, has made it mandatory for the listed firms that atleast 50% of its board members are independent directors. But this has raised an issue of defining an independent director.

he said an independent director earns around Rs 12-16 lakh per year. And since, an individual can become director in 15 firms simultenously, by taking up directorship as a profession, one can earn up to Rs 2 crore a year.

���What is then the difference between a non-executive and independent director?��� he asked. ���The question, therefore, is, how independent are the independent directors?���