Companies Act Section 378W — Chief Executive and his functions
CHAPTER XXI
Commercial / Corporate
Summary
Sub-section (1) requires every Producer Company to have a full-time Chief Executive, whatever that person's official title may be. The Chief Executive is appointed by the Board and must be chosen from people who are not Members of the company.
Sub-section (2) states that the Chief Executive automatically becomes a director of the Board by virtue of holding that office. This director is not subject to retirement by rotation, meaning they do not have to step down and stand for re-election in the usual rotation cycle.
Sub-section (3) provides that, unless the company's articles say otherwise, the Board decides the Chief Executive's qualifications, experience, and terms and conditions of service.
Sub-section (4) says the Chief Executive is to be given substantial powers of management, with the exact extent of those powers being determined by the Board.
Sub-section (5) lists specific powers and functions the Chief Executive may exercise, without limiting the broader authority given under sub-section (4). Under clause (a), the Chief Executive may perform routine administrative acts, including managing the day-to-day affairs of the Producer Company. Under clause (b), the Chief Executive may operate bank accounts, or authorise another person to do so, subject to the Board's general or special approval. Under clause (c), the Chief Executive must make arrangements for the safe custody of the company's cash and other assets. Under clause (d), the Chief Executive may sign documents on behalf of the company when authorised by the Board. Under clause (e), the Chief Executive must maintain proper books of account, prepare annual accounts and arrange for their audit, and place the audited accounts before the Board and at the annual general meeting of Members. Under clause (f), the Chief Executive must provide Members with periodic information about the company's operations and functions. Under clause (g), the Chief Executive may make appointments to posts, but only to the extent the Board has delegated such powers. Under clause (h), the Chief Executive must assist the Board in formulating goals, objectives, strategies, plans, and policies. Under clause (i), the Chief Executive must advise the Board on legal and regulatory matters concerning proposed and ongoing activities, and take necessary action in relation to those matters. Under clause (j), the Chief Executive may exercise powers necessary in the ordinary course of business. Under clause (k), the Chief Executive may discharge other functions and exercise other powers delegated by the Board.
Sub-section (6) states that the Chief Executive manages the affairs of the Producer Company under the general superintendence, direction, and control of the Board, and is accountable for the company's performance.
Official Text
(1) Every Producer Company shall have a full time Chief Executive, by whatever name called, to be appointed by the Board from amongst persons other than Members.
(2) The Chief Executive shall be ex officio director of the Board and such director shall not retire by rotation.
(3) Save as otherwise provided in articles, the qualifications, experience and the terms and conditions of service of the Chief Executive shall be such as may be determined by the Board.
(4) The Chief Executive shall be entrusted with substantial powers of management as the Board may determine.
(5) Without prejudice to the generality of sub-section (4), the Chief Executive may exercise the powers and discharge the functions, namely:—
(a) do administrative acts of a routine nature including managing the day-to-day affairs of the Producer Company;
(b) operate bank accounts or authorise any person, subject to the general or special approval of the Board in this behalf, to operate the bank account;
(c) make arrangements for safe custody of cash and other assets of the Producer Company;
(d) sign such documents as may be authorised by the Board, for and on behalf of the company;
(e) maintain proper books of account; prepare annual accounts and audit thereof; place the audited accounts before the Board and in the annual general meeting of the Members;
(f) furnish Members with periodic information to apprise them of the operation and functions of the Producer Company;
(g) make appointments to posts in accordance with the powers delegated to him by the Board;
(h) assist the Board in the formulation of goals, objectives, strategies, plans and policies;
(i) advise the Board with respect to legal and regulatory matters concerning the proposed and ongoing activities and take necessary action in respect thereof;
(j) exercise the powers as may be necessary in the ordinary course of business;
(k) discharge such other functions, and exercise such other powers, as may be delegated by the Board.
(6) The Chief Executive shall manage the affairs of the Producer Company under the general superintendence, direction and control of the Board and be accountable for the performance of the Producer Company.