When can a small shareholder appoint a director on the board?

Alembic's board room has witnessed a drama with small shareholders pushing for a seat on the board

Legal experts say there is no provision under law that gives an “automatic” right to any shareholder to appoint a director on the board, based on certain threshold shareholdings. However, Section 151 of the Companies Act allows a listed company to have one director elected by small shareholders. Such a director is appointed by an ordinary resolution at a general meeting, for a single term of three years. 

Under the Act, a small shareholder refers to “someone holding shares of nominal value of not more than Rs 20,000”. To elect a director, small shareholders need the support of at least