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

Published on December 06, 2023
Current Context: The Life Insurance Corporation (LIC) of India has introduced changes in its framework for the appointment of shareholders’ directors to its board.
LIC Notifies Framework for Appointment of Shareholders’ Director in 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

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