Independent Directors Preparatory Test

Description

First and foremost Congratulations for making it to this page and thinking about being an Independent Director (ID) in a listed company in India. This is probably the only mock test that you will ever need to clear your exams.

Currently there is a huge shortage of IDs and the industry is looking to desperately fill in this gap with qualified and experienced persons such as yourself. The role is aspirational and very well respected in the industry. The role carries significant importance in Corporate decision making and you get compensated quite well (depending on the company) per meeting as sitting fees and performance bonuses. Apart from the compensation, there is always a significant self learning that occurs from the respective company, sector and industry and the networking with other IDs, MDs and CEOs. You will see yourself making a positive impact, and hence this endeavor can indeed be hugely satisfying.

In October 2019, the MCA made it compulsory for independent directors to pass the online self-assessment proficiency test, which is conducted by the Indian Institute of Corporate Affairs (IICA). To clear this hurdle, several aspiring independent directors, irrespective of their age, are getting ready. The independent director’s databank was jointly established by the MCA and IICA in December 2019.

Two criteria must be met – the individual should find a place on the IICA’s databank and successfully complete the online self-assessment proficiency test. Independent directors (who are not exempted ; only few categories are exempt) have two years from the date of inclusion in the databank to pass the online self-assessment proficiency test.

The online self-assessment proficiency test is conducted by the IICA and ensures that only candidates who are competent – such as possessing  a broad understanding of Companies Act, board decisions and their implications – will be eligible to serve as independent directors in India.

This course comprises of 4 mock tests for candidates who desire to pass the mandatory proficiency test and is my humble attempt to familiarize yourself with the content. The syllabus is varied, covering predominantly Companies Act 2013, Securities Law, basic accountancy, accounting details, financial ratios, secretarial audit and secretarial standards, all about board composition and functions, corporate social responsibility, corporate frauds, including case studies, and enterprise risk management.

If you come from a Tech or any non-business background, the course and exam can be a challenge.  A reading of the Companies Act 2013 is recommended before attempting these mock tests. A latest version of the Act is freely available for download from the MCA site. The mock tests are a good practice before you appear for the final test. They are designed to impart knowledge, build your confidence and enhance your chances of success.

The actual test is not a race against time like most other competitive entrance exams. It is about understanding the fundamentals and choosing the right answer. At times if you are unsure, all four choices appear correct ! Good luck.

For more information on being an Independent Director please visit the official website of IICA.

*Disclaimer: This author assumes no responsibility or liability for any errors or omissions in the content of this course. The information contained in this site is provided on a best effort basis with no guarantees of completeness, accuracy, usefulness or timeliness. Trademarks if any, belong to respective organizations or entities.

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