Section 178. Nomination and Remuneration Committee and Stakeholders Relationship Committee
(1) The Board of Directors of every listed public company and such other classes of companies as may be prescribed shall constitute a Nomination and Remuneration Committee consisting of three or more non-executive directors, of whom not less than one-half shall be independent directors:
Provided that the chairperson of the company may be appointed as a member but shall not chair the Committee.
(2) The Committee shall identify persons qualified to become directors and senior management, recommend appointments and removals and specify the manner for effective evaluation of the performance of the Board, its committees and individual directors.
(3) The Committee shall formulate criteria for qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to remuneration of directors, key managerial personnel and other employees.
(4) The policy shall ensure that remuneration is reasonable and sufficient, performance-linked and balanced between fixed and incentive pay reflecting short and long-term objectives. The policy shall be placed on the company website, if any, and its salient features and web address disclosed in the Board’s report.
(5) A company having more than one thousand shareholders, debenture-holders, deposit-holders and other security holders at any time during a financial year shall constitute a Stakeholders Relationship Committee with a non-executive director as chairperson.
(6) The Stakeholders Relationship Committee shall consider and resolve grievances of security holders.
(7) The chairperson of each committee, or an authorised member in his absence, shall attend general meetings.
(8) Contravention of this section and section 177 attracts the penalty prescribed by this section. Inability to resolve or consider a grievance by the Stakeholders Relationship Committee in good faith shall not constitute a contravention.
Explanation.—“Senior management” means personnel forming the core management team, excluding the Board, comprising members of management one level below the executive directors, including functional heads.
