In a significant move, the government on Monday launched a databank of independent directors which will be a "comprehensive repository" of existing as well as those eligible to be independent directors.
Set up under the Companies Act, 2013, independent directors are required to register themselves with the databank within three months from December 1, as per rules notified by the corporate affairs ministry.
"Companies also may register themselves with the databank to search, select and connect with individuals who possess the right skills and attitude for being considered for appointment as independent directors," the ministry said in an official release said.
The ministry noted that the databank is expected to become a comprehensive repository of both existing independent directors as well as individuals eligible and willing to be appointed as independent directors.
The Indian Institute of Corporate Affairs (IICA), under the ministry, would be maintaining the databank portal.
Independent directors are also required to pass a basic online proficiency self-assessment test which would be available from March 2020. The test has to be taken within 12 months from.
"In order to provide sufficient practice to individuals, a number of online mock tests have also been made available in the system.
The real test can be taken online through a simple scheduling process. The real test would be remotely proctored," the release said.
Independent directors have a substantial role in ensuring good governance practices at corporates. In recent times, many individuals have come under the regulatory lens in connection with irregularities at companies where they were serving as independent directors.
The databank portal has various e-learning capsules and videos for individual users. Besides, a number of value-added services are expected to be rolled out through the portal for capacity building of independent directors.
The databank -- which can be accessed at 'www.mca.gov.in' and 'www.independentdirectorsdatabank.in' -- would provide an easy to access and navigate platform for the registration of existing independent directors as well as individuals aspiring to become independent directors, the release said.
Under the Companies Act, 2013, there are provisions that a company can choose an independent director from a data bank of persons who are eligible and willing to act as independent directors.
The IICA would "create and maintain a data bank containing names, addresses and qualifications of persons who are eligible and willing to act as independent directors, for the use of the company making the appointment of such directors," as per a notification issued earlier this year.