In today’s business environment through India, there has been a lot of focus on the professionals who support and guide the management team in generating long-term added value for the shareholders and society at large, and those who are accountable to the shareholders for the companies’ long-term performance.
Members of self-governing professions are required to accept legal and ethical responsibility for their work and to promote the public’s and society’s interests. One of the most essential qualities of a profession is adhering to tight standards of conduct that uphold strict ethical and moral commitments. A Company Secretary (CS) subject to a strong code of conduct is seen by regulators as an ethical and trustworthy professional whose professional judgement and competence have made a mark in the corporate sector in a self-regulated environment.
As a result, the primary goal of this paper is to demonstrate how company secretaries in India have evolved as professionals over time, with essential competencies in compliance and corporate governance.
In India, regulatory compliance has a direct impact on the ease of doing business, as well as parameters relating to government initiatives such as “Make in India.” According to the World Bank’s Ease of Doing Business Index, India is ranked 63rd, a major improvement in ranking from a few years ago when India was routinely listed after the Top 100 countries.
The function of a CS has altered dramatically over the last three decades, in response to a fast changing economy, industrial environment, and the growth of the demand for corporate governance and ethical business practises. Stakeholders are becoming more aware of compliance issues. It is a professional’s primary responsibility to meet the expectations of stakeholders at all times.
The Role of Company Secretaries in Indian Companies and Their Responsibilities in the Workplace
A company secretary is a qualified professional who is a member of the Institute of Company Secretaries of India (ICSI), which is a statutory professional body in India that promotes, regulates, and develops the profession of company secretaries. Under the rules of the Companies Act, 2013, a CS professional is recognised as a Key Managerial Personnel (KMP), occupying a senior-level position in management and serving on the board of any firm.
Because they are experts in the subject of corporate governance, rules, and processes, CS professionals are the natural conscience keepers for the business sector. They are the Board’s eyes and ears on such things. They serve as a critical link between the company’s management, shareholders (owners), other stakeholders, and regulatory authorities. A CS is an officer who is responsible for ensuring that certain legal criteria are met under various legal statutes, notably the Companies Act of 2013, which applies to businesses. Because the CS is also a “officer in default,” she, like any other member of the board, is responsible for ensuring prompt compliance with the law.is on her similar to any member of the board.
Another key job of a CS is to provide guidance to the board of directors of a company, both collectively and individually, on their roles, responsibilities, and powers. This is a vital duty of a company secretary because it is she who keeps the Board members informed about their required tasks and powers as defined by corporate law, while also assisting the Board in the business’s conduct and affairs. CS is responsible for ensuring that board procedures are followed and reviewed on a regular basis.
Company Secretaries’ Responsibilities and Scope in India Are Changing
The function of a CS has altered dramatically over the last three decades, in response to a fast changing economy, industrial environment, and the growth of the demand for corporate governance and ethical business practises. Stakeholders are becoming more aware of compliance issues. It is a professional’s primary responsibility to meet the expectations of stakeholders at all times.
From being a conscience keeper to compliance officer, governance professional, adviser, business growth strategist, and so on, the company secretary job has taken on new dimensions. The CS profession has now established itself as a prominent player in the business world, taking a leading role in directing companies to success and long-term growth.
They have also been involved in top management decision-making, the framing and implementation of structures and policies for the company’s operations, in addition to looking after legal compliance and requirements and providing counsel to the directors. They also support and advise the board in ensuring excellent corporate governance and adherence to corporate governance rules and best practises.
♦ Responsibilities under the law
Unlike UK legislation, which repealed the requirement for a company secretary for private businesses in 2006, the Companies Act 2014 went into effect on June 1, 2015 and keeps the requirement for a company secretary. The retention of this requirement demonstrates the legislature’s importance of the company secretary’s role, and the proposals go even further by requiring the Board of Directors to ensure that the secretary has the necessary knowledge and experience to discharge the duties of secretary of the company and to keep the records required by the Act. A declaration acknowledging the existence of the secretary’s obligations on appointment will also be needed of the company secretary. The company secretary’s primary responsibility is to ensure that the company complies with company law, maintains certain statutory registers, and files the necessary documents with the Registrar of Companies, such as annual returns, financial statements, and forms relating to changes in share capital, among other things.
♦ Governance in the workplace
In practice, the company secretary’s responsibility has expanded far beyond the minimum statutory obligations described above. The company secretary’s responsibilities include, among other things, establishing and executing systems to promote and maintain good corporate governance. Both the UK Code of Corporate Governance (which the Irish Stock Exchange has embraced through the Irish Annex) and the FRC Guidance on Board Effectiveness recognise this. Both have worked to focus corporations on Board effectiveness and, as a result, how the company secretary may support them. Although this advice is only for listed firms, it is considered best practise, and these corporate governance requirements should be applied by all companies in so far as they are deemed appropriate for the organization’s size and purpose.
The boardroom dynamics are shifting, and chairmen and directors are realising that they require specialised skills and technical understanding in this area, and they are turning to company secretaries for assistance. There are a variety of responsibilities where the company secretary can assist and offer value, some of which have been clearly addressed in the preceding guidance.
♦ Organisational governance
It’s critical that solid governance arrangements are in place, that they’re well-documented, and that they’re conveyed to the rest of the organisation. The company secretary’s role allows them to have a comprehensive view of the governance structure, and they are typically entrusted with ensuring that this framework, as well as any supporting policies and procedures, is well recorded. This should involve making sure the formal documentation required by the UK Code of Corporate Governance is in place, such as a schedule of topics reserved for the Board.
♦ Supportive to chairperson
The company secretary is responsible for advising the Board of Directors on all governance issues through the chairman. They should examine whether the Board and the company’s other governance mechanisms are suitable for purpose on a regular basis, and explore any reforms or initiatives that could improve the company’s governance. The relationship between the company secretary and the chairman is crucial to the effectiveness of the Board.
♦ Committee developments
The company secretary plays a key role in good governance by assisting the Board of Directors and its committees in performing their duties efficiently and in accordance with their terms of reference and best practises. Support includes more than just scheduling meetings; it also includes proactive agenda management and assuring the presentation of high-quality, up-to-date information in advance of meetings. This should allow directors to fully participate in board discussions and debates, as well as improve the Board’s capacity to make sound decisions. Following meetings, the company secretary should pursue and manage follow-up actions as well as provide updates on any issues that arise.
♦ Board of Directors progress
The company secretary’s advice and services should be available to all directors. The company secretary should develop strong working connections with all board members, providing objective advice and acting in the company’s best interests. The company secretary should support the chairman with all development activities, including board evaluation, induction, and training, in order to promote board development. This should include conducting a thorough annual assessment of the Board, committees, and individual directors, as well as ensuring that the assessments’ recommendations are followed through on. Furthermore, the company secretary should oversee the development of personalised induction plans for new directors as well as a training plan for individual directors and the Board.
♦ Communiqué with stakeholders
As a unique contact between the Board of Directors and management, the company secretary serves as a critical link between the Board and the firm. They can help management comprehend the Board’s expectations and value by communicating effectively with them. The company secretary has a key role in dealing with external stakeholders, such as investors, and is frequently the initial point of contact for questions. To ensure that effective shareholder relations are maintained, the company secretary should work closely with the chairman and the Board.
In light of recent economic developments, company stakeholders, particularly in the financial services sector, are becoming increasingly concerned with the company’s conduct of business. As a result, it is critical that best practises are followed at all times and that evidence is available to demonstrate this. The Central Bank’s development of a series of corporate governance guidelines, including fitness and probity standards for some pre-approval controlled operations or persons who conduct controlled duties, demonstrates the need for better standards in this industry. “Ensuring, controlling, or monitoring compliance by a regulated financial service provider with its applicable obligations” is one of the controlled functions.
While compliance monitoring has typically been outsourced in the financial services sector, with the adoption of these new requirements, there is greater caution in the supply of such services, which are more likely to be laid at the feet of the company secretary in the future. True, the business secretary’s job description also involves keeping the Board of Directors up to date on new legislation and how it affects them. The company secretary’s function has been expanded as a result of the growing attention on corporate governance, and the secretary is now considered as the protector of the firm’s compliance with regulatory obligations and best practises.
Author Bio
