Companies will now have to appoint a new independent director within three months of such a post falling vacant, according to the government, reported PTI.
The latest move comes at a time when the regulatory authorities are working on ways to further improve corporate governance practices. There are also concerns in certain quarters about the role of independent directors and the need to ensure that they discharge their duties in a proper manner.
Earlier, in case of resignation or removal of an independent director, the company was required to fill the position within 180 days.
Now, the time period has been reduced to 90 days from the date of resignation or removal, according to a notification issued by the ministry earlier this month.
Changes have been made to provisions under Schedule IV of the Act.
Besides, the ministry has exempted government companies from the ambit of certain norms for independent directors, including those pertaining to manner of appointment.
Markets regulator Sebi's chairman Ajay Tyagi has been raising concerns about the role of independent directors.
Earlier this month, Tyagi had taken a dim view of the absence of selection procedure for independent directors and said many are part of "closed clubs" who are appointed at whims and fancies of companies' promoters.
While stressing that corporate governance practices need to be improved, the Sebi chief had also said some people are quite serious when they take up the role of an independent director, but there are several who are just eager to join the board as per convenience.