Chapter 4 "Chief Executive and other directors" Flashcards
Who is chief executive?
Chief executive means an individual who is given the whole or substantial powers of management of the affairs of the company, subject to control and directions of the directors. It includes a director or any other person by whatever name called.
What is the eligibility criteria for chief executive?
Companies Act does not specify qualification requirements for chief executive. A chief executive can be any person.
A company can fix some qualification requirements by including it in Articles.
What is the ineligibility criteria for chief executive?
A person who is ineligible for appointment as director is also ineligible for appointment or continue as chief executive.
What is the Appointment/ Tenure of first chief executive?
First chief executive is appointed by subscribers of memorandum, for a period upto first AGM.
He may earlier resign or removed.
What is Tenure/ Appointment of subsequent chief executive?
Subsequent chief executive is appointed by directors within 14 days of election, for a period upto 3 years (or for shorter period).
He may earlier resign or be removed.
Who will fill the casual vacancy of chief executive?
> Casual vacancy is filled by directors within 14 days of its occurrence.
Such chief executive shall hold office till directors elected in next election appoint a new chief executive.
What are the roles/ responsibilities/ terms of appointment of chief ?
Companies Act has not fixed role and responsibilities of a chief executive. The terms and conditions of appointment of a chief executive are determined by the directors or company in GM in accordance with the articles of company.
What are the rights of retiring chief executive?
1) Retiring chief executive is eligible for reappointment.
2) Retiring chief executive shall continue to perform his functions till his successor is appointed,
Unless:
> his office was expressly terminated, or
> he is the cause of non-appointment of new chief executive.
Can a chief executive be removed before expiry of his terms?
Irrespective of any provision in articles or agreement with chief executive, he can be removed before expiry of his term:
> By directors with three-fourth majority of total number of directors, or
> By company through special resolution in general meeting.
What is the restriction on chief executive of public company for competing business?
Chief Executive of a public company ( or his spouse or minor children) shall not engage in any business which competes with business carried on by the company or its subsidiary.
At time of appointment he shall disclose to company in writing nature of such business, and his interest.
Can a federal government appoint/ remove chief executive?
Federal Government has power to:
> appoint chief executive if majority of directors are appointed by it.
> remove chief executive if more than 75% of the voting rights are held by it.
> determine terms and conditions of chief executive appointed by it.
What is the criteria& time and tenure of chairman of a listed company?
CRITERIA AND TIME:
Board of listed companies shall appoint a Chairman among non-executive directors within 14 days of election of directors.
TENURE:
Chairman shall hold office for 3 years. However he may earlier resign, may be removed by directors, or may otherwise cease to hold office.
What are the responsibilities of chairman of a listed company?
> Board shall define the respective roles and responsibilities of Chairman. Chairman shall be responsible for leadership and shall play an effective role in fulfilling responsibilities of board.
Chairman shall prepare his report on overall performance of the board in achieving his objectives. This review report shall ne included in annual financial statements
Does approval of commission required to appoint any sole purchase, sale or distribution agent?
A company carrying on a business in pakistan shall not appoint any sole purchase, sale or distribution agent without approval of commission.
However a company is not required to obtain approval of commission if it is incorporated outside pakistan and its major portion of business is conducted outside pakistan.
Who is company secretary of a public company?
A Company secretary means an individual appointed to perform secretarial and other duties usually performed by a company secretary, having such qualification and experience as may be specified.
Company secretary shall be an employee of the company and is responsible for advising the board on compliance of corporate laws and maintains relevant records and register.
