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Business News/ Opinion / Columns/  Opinion | How to crack the new test for independent directors
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Opinion | How to crack the new test for independent directors

The Indian Institute of Corporate Affairs, tasked with creating and maintaining a database of all persons eligible and willing to act as independent directors on boards, now conducts an online proficiency test for the job

Photo: iStockPremium
Photo: iStock

Till 30 November 2019, listed companies and other prescribed unlisted public companies were not required to select independent directors (IDs) from an approved databank of names. However, the situation changed on 1 December 2019, after the ministry of corporate affairs (MCA) notified the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, and the Companies (Accounts) Amendment Rules, 2019.

MCA appointed the Indian Institute of Corporate Affairs (IICA) to create and maintain a database of all persons eligible and willing to act as IDs, including existing directors, and conduct an online proficiency test. The test started on 1 March 2020. Applications are to be submitted by 30 April 2020, and the online proficiency examination conducted by IICA is to be passed by 28 February 2021.

There are exceptions to the rule on passing that online proficiency test. Eligible for a waiver are individuals who have served as directors for a period of 10 years on the date of inclusion of their name in the databank, or key managerial personnel in a listed public company or unlisted public company with paid-up capital of 10 crore or more.

Professionals who wish to take the online proficiency test have to register at They can attend training programmes to update themselves on the subjects, topic, and syllabus. I attended a one-day programme organized by the Institute of Directors (IOD). This made me realize that the experience of being an ID for more than three years was not good enough. Besides the academic part, the session helped me get tips from subject matter experts and provided enough time for discussion with the faculty. The mock test gave me a sense of what type of questions to expect.

In a way, the IOD programme set the ball rolling for my online test preparation. Next, I referred to the 42 modules, accessible only to those who register, that are available on the IICA portal as part of their learning management system. The modules are divided into two parts, board essentials and practice, and have a duration of at least 40 minutes and at most 70. Designed and explained by experts, they can be heard through a good inbuilt audio-visual mechanism. During the process of familiarization with the course material, do go through the IICA portal, which is informative and comprehensive.

The syllabus is vast—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. As I come from a human resources background, this required serious study. A friend and practising company secretary helped clarify complex questions. However, laser-sharp focus and commitment in terms of time and effort made me feel confident on examination eve.

So when does one appear? There are three slots everyday—8 to 9am, 2 to 3pm and 8 to 9pm. Choose and block what works for you. The system is well designed through the Mettl platform. You get a reminder email on the day of your selected slot with a few key dos and don’ts. The test can be taken only on a desktop or laptop with a functional webcam. No external help should be attempted or one risks disqualification.

The test is for 60 minutes during which 50 questions have to be answered. Every question has a weightage of two marks. One has to get 60 marks out of 100 to pass. The questions may appear simple, but are actually tricky, and if one attempts them without preparation, it could get difficult. The good thing is there is no restriction on the number of times a professional can take the test.

The test is not a race against time like the Common Admission Test or other competitive exams. This test is about knowing the fundamentals, understanding the question, and picking the right answer. In most questions, if you are not sure, almost all four choices appear correct. That is how the questions are designed.

I greatly benefitted from taking the mock test on the IICA portal several times. It helped me understand the test environment, rules, administrative process and dos and don’ts while being proctored through a webcam. Once time is up, the test closes on its own. You can log out and log in again on the portal to check the result displayed on the screen. On clearing the test, a certificate is awarded that can be downloaded.

Here are some learnings and observations that might help those who want to take the ID test. It requires effort and preparation time. The test process and environment are well designed and monitored. Mock tests are an effective way to assess your level of preparedness. Attending the one-day orientation programme by IOD would be worth it. During the test, don’t let speed of answering or thinking about the result distract you. The system has an option that lets you review and revise answers. Use that. Having a clear mind and staying calm are what you need most to pass the 60-minute test.

Aparna Sharma is a senior HR professional, independent director and author

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Updated: 12 Mar 2020, 09:11 PM IST
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