Executive Director– Executive directors are those who work for the company and are actively involved in its daily operations. They are quite knowledgeable about the business. Managing directors and full-time directors are also included in this group.
Non- Executive directors– Non-executive directors are those who are neither hired by the company nor actively involved in its daily operations. This group primarily consists of independent directors with professional backgrounds, nomination directors, etc.
Rotational Directors– Corporations other than private entities and specific government companies must have a minimum of two thirds of its directors resign through rotation. Articles may provide that all directors will retire in turn. Rotational directors may choose to resign by lot or by agreement if they make up at least one-third of the board. Director who is retiring may be reappointed, but not in the circumstances listed in section 152(7). (b). A retiring director is not permitted to continue serving after the AGM has ended. Independent directors and nominee directors chosen by financial institutions are not counted when calculating the overall number of directors.
Non-rotational directors– Directors other than rotational are non rotational directors.
First director– Directors specified in the articles at the time of incorporation. If not specified then shall be selected by majority of memorandum subscribers as per Table F and if Table F is not applicable then all the subscribers are first directors. They are appointed till the company appoints subsequent directors.
Manager/ Managing Director/ Whole time directors– As per section 203, every listed company or any public company having paid up share capital of more than 10 crores or a company not falling under above two but having paid up share capital of more than 5 crores is required to appoint managing director/manager/whole time director, company secretary and chief executive officer. A person who fits in the definition provided in the section 2(54) of the Act is known as managing director of the company. Similarly, Manager is defined under section 2(53) and whole-time director in section 2(94). No such person can be appointed for a period of more than 5 years although such restriction is not applicable on private company. Section 196 provides with the appointment of such key managerial persons. Such person must be resident of India, aged between 21 to 70 years (subject to condition for above 70 years) and all other eligibility criteria as per schedule V.
Independent directors– As the name suggests such directors are not related in certain ways with the company. Independent Directors have to comply with the criteria’s given in section 149(6).
Every listed public company shall have not less than one third of its directors as independent.
Nominee director– Such directors are appointed by third party subject to the articles of the company in pursuance with the law or any provisions for the time being in force. For example a director appointed by bank.
Woman director– Following companies must have atleast one director as woman-
1. Every listed company and
2. Every public company having paid up share of 100 crores or more
3. Every public company having turnover of 300 crores or more. Vacancy shall be filled by 3 months from such vacancy or immediate next board meeting after such vacancy whichever is later.
Additional director– All public or private companies can appoint additional director but the articles should allow for the same and such person shall not fail to be appointed as director in general meeting. Such director can be appointed in board meeting or passing resolution by circulation. Such director cannot hold office beyond the next AGM or the due date on which such AGM is ought to be conducted. For example, a company did not organise AGM till 30th September but the additional director in any case cannot hold office beyond 30th September. In case company acquires permission from prescribed authority to hold AGM at a later date then that date shall be the last date for additional director which should not be any date later than 31st December.
Alternate director– When a director is leaving India for a period of 3 months then Board may appoint an alternate director (who is not director in the same company nor holding alternate directorship for anyone else in the same company) by articles or passing special resolution. He/she shall have same position as of original director. He shall hold the post till the director in place of whom he is appointed returns back or the period of holding office of the original director comes to an end. Directors by small shareholders– Only listed companies whose shareholders having nominal value of less than 20000 proposes to appoint a small shareholder’s director have to give notice atleast 14 days before the meeting. 1000 small shareholders or 10% of total number of shareholders whichever is lower is required to give such notice. Such a director shall not be appointed for a period of more than 3 consecutive years then a cooling period of 3 years before such appointment in the same company. A person can hold such directorship in two companies maximum second one not being the competitor of the first one. Grounds of disqualifications, vacation of office, independent director are as it is applicable on such directors as well.
Casual vacancy– Such vacancy can be filled by board if the director vacating the position was appointed in general meeting. Although there is no obligation to fill such vacancy. Term of such director shall not exceed the term of director for whom such vacancy was filled. Proportional representation– Except for the government companies, to avoid the situation of dominance of majority voting hands over the minor ones a company can appoint not less than 2/3rd of directors by proportional representation so that minority shareholders are not deprived off their powers and rights in the company. Every person has right to showcase his ability to stand in the position of director in the public company. As per section 160 of the Act, any person can give his signed candidature at the registered office of the company atleast 14 days prior to the meeting with a deposit of Rs. 1 lakhs (Rs. 10000 in case of Nidhi company). Such amount is refunded if the person acquires such position or he gets atleast 25% of votes in favour.
