Module: | Statutory Audit, NFRA & ICAI Standards
Q62: Consider the following statements regarding the Familiarization Programme for Independent Directors under SEBI LODR Regulations:
1. Listed entities are required to familiarize Independent Directors with the company's operations, business model, and the specific roles and responsibilities they hold.
2. The company must upload the details of the familiarization programmes, including the number of hours spent by each Independent Director, on its official website.
3. A web link to these detailed familiarization programmes must be explicitly provided in the Corporate Governance Report section of the Annual Report.
Which of the above statements is/are correct?
2. The company must upload the details of the familiarization programmes, including the number of hours spent by each Independent Director, on its official website.
3. A web link to these detailed familiarization programmes must be explicitly provided in the Corporate Governance Report section of the Annual Report.
Which of the above statements is/are correct?
✅ Correct Answer: D
🎯 Quick Answer:
D. All statements 1, 2, and 3 are correct.Structural Breakdown: Statement 1 is correct; SEBI LODR mandates this to bridge the knowledge gap between executive management and outside directors.
Statement 2 is correct; quantitative tracking (hours spent, number of sessions attended) must be publicly hosted on the company's website.
Statement 3 is correct; the Annual Report must point investors directly to these disclosures via a web link.
Historical/Related Context: Following several banking failures where Independent Directors claimed they simply "didn't understand the complex loan models," SEBI mandated formal, documented training.
It shifted the excuse from "I didn't know" to a verifiable record of whether the director actually bothered to attend training.
Causal Reasoning: Publicly disclosing the hours spent by each director allows shareholders to assess whether an Independent Director is actively engaged in learning about the company's evolving risks or is merely treating the board seat as a passive, prestigious sinecure.