To strengthen corporate governance practices, the Institute of Company Secretaries of India will soon come out with a new secretarial standard asking a director of a company to disclose his transactions with other entity in which he has financial interest.
“A new accounting standard ‘Related Party Transaction’ is expected to come out within next 2-3 months which is aimed to strengthen corporate governance practices,” ICSI President Vinayak S Khanvalkar told reporters here today.
ICSI regulate the profession of Company Secretaries in the country.
Elaborating on upcoming ‘Related Party Transaction’ Secretarial Standard, he said, “if a director of a company carries out any transaction with any other entity (Company or partnership), in which he also holds any position, he will be required to disclose such transaction to the management of the company which will ensure that no siphoning off funds will take place in any manner.”
Stating that Secretarial Standards Board was working on giving final touches to this new standard, he said that it would also determine the overall format of making disclosures by the Director and keep a check on preventing any unethical transactions.
At present, ICSI has 10 secretarial standards, including standard on board meeting, dividend and transmission of shares.
With a view to align the company secretarial course with the requirements of corporate, ICSI under its Vision 2020 has roped in a consultancy company AC Nielson which will seek views of students, members and corporate in order to suggest changes in syllabus of the course.
Realising ICSI’s important role in global company secretaries profession, the institute along with institutes of Bangladesh, Kenya, Pakistan constituted International Federation of Company Secretaries.
“This move will help Company Secretaries profession in different countries to come under an umbrella to build Company Secretary a global brand,” he said. It will also help the profession work unitedly at the WTO and such multilateral forum.
Talking about the emerging areas for a Company Secretary, he said that corporate restructuring, insolvencies, mergers, amalgamations, international tax planning, GST, knowledge process outsourcing are new areas in which Company Secretaries should excel.
Source : Economic Times