Question

Nominee director cannot be termed independent director because,
Select one:
O a. They need to attend only those meeting where financial matters are being
discussed
O b. Nominee directors are only reporting to the financial institution as they are
employed by them
O c. Nominee directors do not retire by rotation
d. Nominee directors will be senior people​

Answer 1

(B) Nominee directors are only reporting to the financial institutions as they are employed by them.

Nominee directors are not independent directors as they cannot make any decisions by themselves. They are employed by the company to perform activities according to them. If they don't do so it will be considered a breach of their contract. The nominee director can be appointed by central or state government or financial institutions to represent the interest in the company and they do not hold any share of the company so they cannot be termed as an independent director.