Cracking Independent Director's Exam (IICA)

Are you aspiring to become an independent director?

Would you like to be appointed by the Board of a major company?

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Have you accumulated several years of experience in the corporate sector and are now looking to explore new areas where you can leverage your expertise to contribute further?

Do you possess over a decade of experience in fields such as finance, law, management, sales, marketing, research, corporate governance, operations, or other areas related to a company's business?

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Are you retired or approaching retirement and seeking lucrative part-time opportunities to generate income while utilising your extensive work experience?

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You can become an Independent Director and join the Board of Directors of large companies in India.

There is a growing demand for skilled independent directors, as more companies are now required to have a minimum number of independent and non-executive directors. Due to amendments in the Companies Act, the rapid formalisation of Indian SMEs, and the exponential growth of startups, every listed company, as well as large companies with paid-up capital exceeding Rs. 10 crore, turnover over Rs. 100 crore, or outstanding loans, debentures, and deposits over Rs. 50 crore, or funded startups planning an IPO, must appoint at least one-third of their directors as independent if they are public unlisted companies.

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Independent Directors play a crucial role in company governance by ensuring that the board of directors' decisions are impartial and free from conflicts of interest, thereby preventing misgovernance. As an independent director, you will attend board meetings of listed companies, review their financial documents, and ask pertinent questions to ensure proper checks and balances are in place. This role is not only prestigious but also financially rewarding.

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With the 2020 amendment in Schedule V of the Companies Act, 2013, Independent Directors can earn annually between Rs. 12 lakhs (in cases of negative effective capital) to Rs. 24 lakhs plus 0.01% of the effective capital in excess of Rs. 250 crores. This role is part-time, has no retirement age, and allows you to continue reaping the benefits of your past work experience.

Factors such as digitization, post-pandemic government reforms like UPI, formalization, and India's high economic growth potential are prompting more informal sector businesses to adopt corporate structures, secure venture capital funding, and scale up, creating ever-expanding opportunities.

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Currently, there are 20,798 registered Independent Directors in India, with 10,805 having already passed the Independent Directors’ exam. Given the existence of almost 22 lakh companies, 1.67 lakh incorporated companies, and 7,500 listed companies in India, the demand for Independent Directors is at least five to ten times higher.

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Even if you are an executive director, CEO, CXO, or a startup founder, qualifying for this exam signals your expertise in corporate governance best practices.

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To become an Independent Director, you need to pass an exam.

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Eligibility for the Test

• Independent directors already registered with the Independent Director Database.

• Professionals aspiring to become independent directors who have registered with the Independent Director Database.

• HR managers, compliance professionals, and entrepreneurs prepared to take the Independent Directors' exam and serve as independent directors on a company's board.