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Emerging Role of Company Secretaries In Emerging Role of Company Secretaries in Corporate Governance “Corporate Governance is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders.” -Institute of Company Secretaries of India Good Corporate to be competent enough to handle the pressure of governance relates compliance under various jurisdictions. Company to systems Secretary is a competent officer to ensure compliances; of supervision, this is the reason that today appointment of a Company monitoring and sharing Secretary is being made mandatory in various jurisdictions. of information with the India, Pakistan, Bangladesh, Nepal, Singapore, Malaysia, stakeholders to Maldives, Hong Kong, Kenya are some of the countries generate confidence which have made the appointment of a Company and trust with Secretary mandatory for companies. customers, suppliers, In U.K. it is mandatory for every public company to creditors and have a Company Secretary. Few key findings of survey maximizing corporate done by Henley Business School and ICSA-(UK) on the value for its role of company secretaries are summarised below: shareholders. The four 1. The role of the company secretary is much more than Atul H.Mehta key elements of just administrative. At its best, it delivers strategic President corporate governance leadership, acting as a vital bridge between the Institute of Company are transparency, executive management and the board and facilitating Secretaries of India,The fairness to all the delivery of organisational objectives. stakeholders, disclosure of all financial and non-financial 2. Company secretaries are ideally placed to align the information in an easily understandable manner and interests of different parties around a boardroom supervision of the company’s activities by professionally table, facilitate dialogue, gather and assimilate relevant competent and independent Board of directors. To build information, and enable effective decision-making. this confidence, it is imperative that sturdy systems are They are often the only people to know first-hand how in place to ensure due compliance of laws and to bring the decisions made have been reached. transparency in operations and disclosure of information 3. The skills and attributes of the best company to the stakeholders. secretaries are closest to those of the chairman: The Company Secretary plays a crucial role in the humanity, humility, high intelligence, understanding governance of any organisation. The board and particularly of agendas, negotiation and resilience. the Chairman of the board relies, or ought to rely, on the 4. It is vital that company secretaries have both direct Company Secretary to advise them in respect of current and informal access to board members – executive best corporate practices, corporate governance norms and non-executive directors (NEDs), CEOs and and practices, directors’ duties under the law, board chairmen. reporting and disclosure obligations, listing requirements 5. Board members often have a lack of awareness of the and meetings procedure. ways in which the company secretary supports an The Companies Act, 2013 leapfrogs from the regime of organisation in its decision-making. Boards may control to that of liberalisation/self-regulation, which miss out on making full use of the skills, knowledge enables the corporates to play as per the rules of the and experience at their disposal. game in a dynamic environment. This calls for good 6. Company secretaries are often the longest-serving amount of self-regulation and corporate governance on members present at board meetings, and so are a their part, which necessitates the services of independent, vital repository of company history and culture, and a but competent and responsible governance professionals, guarantor of continuity. like Company Secretary. 7. Company secretaries are embedded in the process of making boards more effective; they contribute by Redefining the role of Company Secretary observing boards in action and advising on any skills The role of company secretary in the governance of gaps that need filling. organisations has become more prominent as a result of 8. The breadth of the company secretarial role includes ongoing regulatory developments and changing additional responsibilities such as being an officer of stakeholder expectations. This role of company secretary the company, chief of staff to the chairman and has been recognised worldwide by major jurisdictions. adviser to the board on governance. Dynamism and globalization requires board of a company A Company Secretary as governance professional is · Report on Annual General Meeting: Every listed thus a key person to guide the corporates to achieve its public company is required to prepare a report on each defined objectives within the forwalls of the law. annual general meeting including the confirmation to the effect that the meeting was convened, held and Company Secretary under the Companies Act, 2013 conducted as per the provisions of the Companies The Companies Act, 2013 (Act) has catapulted the Act, 2013 and rules made thereunder. The report is profession of Company Secretaries to newer heights. also required to be signed by company secretary of The dominant theme of Companies Act is self regulation. the company. The principal responsibility in this regard has been · Functions and Duties: For the first time, the functions entrusted on the Company secretary, who has been of a company secretary have been stipulated in the given an alleviated position in the corporate hierarchy. Companies Act, 2013. The Act casts an overwhelming The Act confers a special status on Company Secretary responsibility on Company Secretary in employment as Key Managerial Personnel and has bracketed him in the discharge of their duties and they are expected along with Managing Director, Chief Executive Officer, to play a proactive role in meeting the expectations of Manager, Whole-time director, Chief Financial Officer. A various stakeholders. Other than the traditional role, Company Secretary is now appointed only through the the Companies Act, 2013 codifies the functions and resolution passed in the Board meetings. duties of Company Secretary, as under: The Act provides substantive oversight role for company Ø Reporting to the Board about compliance with the secretary. For the first time the functions of the company provisions of the Act, the rules made thereunder secretary are codified to include reporting on compliance and other laws applicable to the company; with the provisions of the Companies Act, 2013, the rules Ø Ensuring that the company complies with the made thereunder and other laws applicable to the applicable secretarial standards issued by Institute company. This in itself is a huge responsibility for the of Company Secretaries of India, as approved by company secretary to rise to the expectations of the Central Government. The Institute has issued two company and the regulators. Further, the rules provide Secretarial Standards under section 118(10) of the that it is the duty of the company secretary to provide to Companies Act, 2013, namely, Secretarial the directors of the company, collectively and individually, Standard on Meetings of the Board of Directors such guidance as they may require, with regard to their (SS-1) and Secretarial Standard on General duties, responsibilities and powers; to assist and advise Meetings(SS-2). These Standards have come the Board in ensuring good corporate governance and in into effect from 1st July, 2015; complying with the corporate governance requirements Ø Providing to the directors of the company, and best practices and to assist the Board in the conduct collectively and individually, such guidance as of the affairs of the company. they may require, with regard to their duties, Company Secretary is a key functionary in the corporate responsibilities and powers; pyramid. With increasing emphasis on the principles of Ø Facilitating the convening of meetings and good governance and on compliances, responsibilities attending Board, committee and general meetings of company secretary have increased manifolds towards and maintaining the minutes of these meetings; safeguarding the interests of all stakeholders. Ø Obtaining approvals from the Board, general The substantially enhanced role of company secretary, meeting, the government and such other authorities both in employment and in practice, is summarised as required under the provisions of the Act; below: Ø Representing before various regulators, and other authorities under the Act in connection with COMPANY SECRETARY IN EMPLOYMENT discharge of various duties under the Act; · Key Managerial Personnel (KMP) Ø Assisting the Board in the conduct of the affairs of The Companies Act, 2013 confers a special status on the company; Company Secretary as the Key Managerial Personnel Ø Assisting and advising the Board in ensuring good (KMP). It provides that every listed company and corporate governance and in complying with the every other public company having a paid up share corporate governance requirements and best capital of ten crore rupees or more has to appoint a practices; and whole time KMP. Ø Discharging such other duties as have been The appointment of whole time KMP has to be made specified under the Act or rules. by a Board resolution, which is a testimony
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