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Annexure 3 to Board’s Report
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Positive Attributes and Independence of Directors

1. Definition of Independence 5. Not achieve or attempt to achieve any undue gain or
advantage either to himself or to his relatives, partners,
ʀ A director will be considered as an ‘Independent
or associates.
Director’ (‘ID’) if the person meets with the criteria for
‘Independent Director’ as laid down in the Companies 6. Not assign his office”.
Act, 2013 (‘the Act’) and SEBI (Listing Obligations and Additionally, the Directors on the Board of a Tata Company
Disclosure Requirements) Regulations 2015 (‘Listing are also expected to demonstrate high standards of ethical
Regulations’). behaviour, strong interpersonal and communication skills and
ʀ The definition of Independent Director is as provided in soundness of judgment.
the Act and Listing Regulations. IDs are also expected to abide by the ‘Code for Independent
ʀ Current and ex-employees of a Tata company may Directors’ as outlined in Schedule IV to section 149(8) of the Act
1
be considered as independent only if he/she has or and adopted by the Board. The Code specifies the guidelines
had no pecuniary relationship with any Tata company of professional conduct, role and function and duties of
(due to employment/receipt of monthly pension by Independent Directors. The guidelines of professional conduct
way of Special Retirement Benefits/holding consultant specified in the Code are as follows:
or advisor positions) during the two immediately “An Independent Director shall:
preceding financial years or during the current financial
year. 1. uphold ethical standards of integrity and probity;
2. Qualifications of Directors 2. act objectively and constructively while exercising his
duties;
ʀ Boards will ensure that a transparent board nomination
process is in place that encourages diversity of thought, 3. exercise his responsibilities in a bona fide manner in the
experience, knowledge, perspective, age and gender. interest of the company;
4. devote sufficient time and attention to his professional
ʀ It is expected that boards have an appropriate blend of
obligations for informed and balanced decision making;
functional and industry expertise.
5. not allow any extraneous considerations that will
ʀ While recommending appointment of a director, it vitiate his exercise of objective independent judgment
is expected that the Nomination and Remuneration in the paramount interest of the company as a whole,
Committee (‘NRC’) consider the manner in which while concurring in or dissenting from the collective
the function and domain expertise of the individual
judgment of the Board in its decision making;
contributes to the overall skill-domain mix of the Board.
6. not abuse his position to the detriment of the company
ʀ ID’s ideally should be thought/ practice leaders in their or its shareholders or for the purpose of gaining direct
respective functions/ domains. or indirect personal advantage or advantage for any
3. Positive attributes of Directors associated person;
Directors are expected to comply with duties as provided in 7. refrain from any action that would lead to loss of his
the Act. For reference, the duties of the Directors as provided independence;
by the Act are as follows: 8. where circumstances arise which make an independent
1. “Act in accordance with the articles of the company. director lose his independence, the independent
director must immediately inform the Board accordingly;
2. Act in good faith in order to promote the objects of the
company for the benefit of its members as a whole, and 9. assist the company in implementing the best corporate
in the best interests of the company, its employees, the governance practices.”
shareholders, the community and for the protection of
environment. On behalf of the Board of Directors
3. Exercise duties with due and reasonable care, skill and
diligence and exercise independent judgment.
Bhaskar Bhat R. Mukundan
4. Not be involved in a situation in which he may have a Director Managing Director & CEO
direct or indirect interest that conflicts, or possibly may
conflict, with the interest of the company.
Mumbai, 18 May, 2018

1 ‘Tata company’ shall mean every company in which Tata Sons Limited or Tata Industries Limited or any company promoted by Tata Sons Limited or Tata Industries Limited
is promoter or a company in which such companies whether singly or collectively hold directly or indirectly 26% or more of the paid-up equity share capital OR in which
the shareholding of such companies represents the largest Indian holding apart from holdings of financial institutions/mutual funds OR a company which is permitted by
Tata Sons Limited to use the Tata brand name.
72 Annual Report 2017-18