Meetings of Committees of the Board

Why Committees Exist

A company's full Board cannot personally scrutinise every financial statement, every related-party transaction, or every shareholder complaint in the detail each deserves — the Board's time is limited, and specialised matters need focused, expert attention. To solve this, the Companies Act, 2013 requires certain classes of companies to constitute Committees of the Board: smaller groups of directors, drawn from the Board itself, each given a specific area of responsibility. A Committee meeting is still a meeting of directors, following broadly the same notice-and-quorum discipline as a full Board Meeting, but its resolutions only bind the company within the scope the Board has delegated to that Committee — larger or company-wide decisions still return to the full Board.

Audit Committee — Section 177

Every listed public company, and certain other prescribed classes of public companies (broadly, those crossing a paid-up capital, turnover, or borrowings threshold laid down under the rules), must constitute an Audit Committee of the Board consisting of a minimum of three directors, with independent directors forming a majority of the Committee. A majority of the members, including the Chairperson, must be persons with the ability to read and understand financial statements. The Audit Committee's core role is to oversee the company's financial reporting process, recommend the appointment and remuneration of auditors, review the annual financial statements before the Board approves them, and scrutinise related-party transactions — functioning as the Board's own internal financial watchdog.

Nomination and Remuneration Committee — Section 178(1)

The same classes of companies that must constitute an Audit Committee must also constitute a Nomination and Remuneration Committee, made up of three or more non-executive directors, of whom not less than one-half must be independent directors. This Committee identifies persons qualified to become directors and senior management, recommends their appointment and removal to the Board, and formulates the company's policy on the remuneration of directors, key managerial personnel, and other senior employees — keeping pay and appointment decisions at arm's length from the very executives they concern.

Stakeholders Relationship Committee — Section 178(5)

A company is required to form a Stakeholders Relationship Committee if, at any time during a financial year, it has more than one thousand shareholders, debenture-holders, deposit-holders, or other security holders. Chaired by a non-executive director, this Committee's job is to consider and resolve the grievances of the company's security holders — complaints about a delayed share transfer, non-receipt of the annual report, or non-receipt of a declared dividend are exactly the kind of matter this Committee exists to handle promptly, rather than letting them pile up unresolved at Board level.

Corporate Social Responsibility (CSR) Committee — Section 135(1) …