1. Appointment of Directors

A director is a natural person appointed to the board of a company and occupying the position of director by whatever name called — Section 2(34). Every director must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs before appointment — Section 154.

Minimum / Maximum numbers — Section 149:

• One Person Company (OPC): minimum 1, maximum 15.
• Private Company: minimum 2, maximum 15.
• Public Company: minimum 3, maximum 15.
• Company may increase beyond 15 by passing a Special Resolution.

Modes of appointment:

• First Directors: named in the AoA or, if not so named, the subscribers to the MoA are deemed first directors — Section 152(1).
• By shareholders in General Meeting: subsequent directors are appointed by an ordinary resolution at the AGM. Two-thirds of the directors of a public company must retire by rotation, and at every AGM one-third of the rotational directors retire and are eligible for re-appointment.
• By the Board: the Board may appoint additional directors (Section 161(1)), alternate directors (Section 161(2)) where an original director is abroad for more than 3 months, and fill casual vacancies (Section 161(4)) — subject to shareholder ratification at the next AGM.
• Nominee Directors: appointed by financial institutions or investors under contractual rights; not subject to retirement by rotation.
• Women Director — Section 149(1): every listed company, and every public company with paid-up capital ≥ ₹100 crore or turnover ≥ ₹300 crore, must have at least one woman director.

2. Disqualifications of Directors — Section 164

A person shall not be eligible for appointment as director if:

• They are of unsound mind (declared by a competent court).
• They are an undischarged insolvent.
• They have applied to be adjudicated as insolvent and the application is pending.
• They have been convicted by a court of any offence involving moral turpitude or otherwise and sentenced to imprisonment for 6 months or more, and a period of 5 years has not elapsed from the date of expiry of the sentence.
• They have been convicted of an offence under the Companies Act (certain specified sections) and sentenced to imprisonment of 7+ years.
• A court or Tribunal has passed an order disqualifying them from being a director and such order is in force.
• They have not paid calls on shares held in any company, and 6 months have elapsed.
• They have been convicted of an offence under SEBI, RBI, NHB or IRDA laws and sentenced to imprisonment for 6 months or more (5-year disqualification thereafter).
• Section 164(2): a director of a company which has failed to file Annual Returns or Financial Statements for 3 consecutive financial years, or has failed to repay deposits or debentures for 1 year or more, is disqualified from being a director of that company or any other company for 5 years from the date of disqualification.

3. Duties of Directors — Section 166

The directors' duties are codified in Section 166, which reflects the common law fiduciary duties:

• Duty to act in accordance with the AoA: directors must act within the company's constitutionional framework and must not exceed their powers.
• Duty to act in good faith and in the best interest of the company: decisions must be made to promote the company's long-term success and benefit stakeholders as a whole — employees, shareholders, community.
• Duty to exercise independent judgment: directors must form their own view on issues and may not simply rubber-stamp management's proposals or blindly follow a dominant director.
• Duty of care, skill and diligence: directors must act with the care and diligence expected of a reasonably diligent person with their knowledge, experience, and position.
• Duty to avoid conflict of interest: directors must not place themselves in a position where their personal interest conflicts with the company's interest; any conflict must be disclosed under Section 184.
• Duty not to achieve undue gain or advantage: directors must not use their position, company's property, opportunities, or confidential information for personal benefit; if they do, they must account for it to the company.
• Duty not to assign office: a director's duties are personal and cannot be delegated to a non-director.

Breach of duties exposes directors to personal liability — the company may sue for damages, disgorgement of profit, or injunctions. In cases of fraud, criminal liability under Section 447 applies.