NOMINEE DIRECTORS

Appointment Nominee Directors are Directors appointed by Central Government u/s 408 or Financial institutions constituted under an Act of parliament. Following provisions shall apply to nominee directors appointed by Central Government u/s 408 and financial institutions constituted under the Act of Parliament: they are not required to retire by rotation they are not counted in the total number of directors they may be appointed even if there is no provisions in the articles for their appointment their appointment may result in increasing the strength of the Board beyond the Maximum number

of directors as specified in the articles - they are not required to hold qualification shares - they can be removed only by the authority appointing them Other provisions All the provisions of Companies Act, 1956 shall apply to such directors, specifically, the following provisions must be checked: the articles of the company must specifically provide that nominee directors may be appointed the appointment of nominee directors must not result in a contravention of Section 255.