Bengaluru | 20 Jan, 2017 (2 years, 10 months ago)

General Advice

What are the benefits to being a Non-Executive Director in a company?

How involved does a NED get in a company? Can an NED get a share of the company? what are the legal benefits of being an NED?
Answers
28 Jan, 2017 | 19:12

HI,
Being a NED in a company doesnt mean being like a sleeping partner in a partnership firm. A NED has to perform almost all the roles of a director and has to take part in planning and management though, it may excuse itself from taking regular and day to day decisions of the company. The NED can also have shares in the company and there does not seem to be any impediment.

The major legal benefit is that the NED is only responcible for the acts which were specifically known to him and he failed to act diligently. While all directors are equally liable in a company, the liability of a NED is on a lower footing and the Knoweldge Test developed by the courts will apply.


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