Q.Distinguish between an Independent Director and a Nominee Director.

Both are non-executive directors, but they exist for opposite reasons — one is meant to have no stake in anyone's interest, the other is appointed specifically to represent one party's interest.

The governing provisions also differ: Section 149(6) for Independent Directors, Section 161(3) for Nominee Directors.

Independent Director [Section 149(6)]:

• Is a non-executive director who is a person of integrity with relevant expertise.
• Has no material pecuniary relationship with the company, its promoters, or its directors, and is not related to them.
• Exists to bring objective, unbiased judgment to Board decisions, free of any personal or financial stake.
• Every listed public company must have at least one-third of its total directors as independent directors [Section 149(4)].

Nominee Director [Section 161(3)]:

• Is appointed specifically to represent the interest of a particular outside party — typically a bank, financial institution, or investor that has lent money to or invested in the company, or a government body — under an agreement or order.
• Their role is explicitly to watch over and safeguard the interest of the party who nominated them, which is the opposite of "no stake."
• Is appointed by the Board under the terms of the relevant agreement/order, not through the general appointment process.