LIC Notifies Framework for Appointment of Shareholders’ Director in its Board

Current Context: The Life Insurance Corporation (LIC) of India has introduced changes in its framework for the appointment of shareholders’ directors to its board.

• The new framework requires either 1,000 shareholders or 10% of the total shareholders, whichever is lower, to initiate the process.
• The individual chosen as a shareholders’ director will be appointed by the board for a four-year term, with the option for re-election and re-appointment for an additional four-year term.
• However, the person appointed as a shareholders’ director cannot hold a similar position in more than two body corporates at the same time.
• Also, the second body/corporation in which they have been appointed should not be in a business that is competing or in conflict with the business of LIC.
• The Nomination and Remuneration Committee of the LIC Board has been tasked to carry out adequate due diligence at the time of appointment or re-appointment as a shareholders’ director and for continuation as a shareholders’ director.

Question:

Q.1 What is the term of a shareholders’ director in LIC?
a. Two years
b. Three years
c. Four years
d. Five years