Guidance Note on Annual Secretarial Compliance Report by ICSI highlights the process and scope of Annual Secretarial Compliance Report and also provides detailed checklists with respect to all mandatory laws as specified in the prescribed format by SEBI.
Corporate Governance and Compliance are intricately linked. Governance is the overall management approach, Board Members and Senior Executives use to control and direct an organization. Compliance is the process through which companies demonstrate that they have confirmed to specific requirements of laws, regulations, contracts, strategies and policies. Both governance and compliance involve rules of conduct and controls on organizational behaviour.
It was always comprehended by both the Regulators and Corporates that enactment of various laws is not enough and the desired results cannot be achieved unless their implementation is geared up. This gap is filled by the Compliance Reporting Mechanism which ensures that all applicable rules, regulations and standards set by regulatory bodies and government agencies are adhered to and implemented coherently, consistently and in the right spirit.
Failure to comply means businesses are subject to regulatory penalties, including fines and imprisonment. Reporting of Compliance ensures that a business is complying with the domestic and international regulations and also assessing the internal controls and processes which ensure that the rules are being followed.
The purpose of the Compliance Reporting is to hold processes accountable, not let them fall to the wayside and provide for modification when there is a risk to compliance.
Realising the need of growing Compliance Reporting mechanism in letter and spirit, the Indian Capital Market Regulator, SEBI came out with the Circular dated February 08, 2019 mandating Annual Secretarial Compliance Report to be submitted by a Company Secretary in Practice to the listed entity on an annual basis, regarding compliance of all applicable SEBI Regulations and Circulars/ Guidelines issued thereunder.
All these developments, policy initiatives and new legislations emphasize the importance of accountability and transparency, for which the SEBI has entrusted Company Secretaries in Practice with the responsibility to exercise check on the Secretarial Compliances of a listed entity on annual basis.
Further, the SEBI has suggested the ICSI to bring out a Guidance Note in this regard. In this direction, the Institute has brought out this Guidance Note to sensitize the members of the Institute to accomplish the task to the utmost satisfaction of all the stakeholders. This Guidance Note highlights the process and scope of Annual Secretarial Compliance Report and also provides detailed checklists with respect to all mandatory laws as specified in the prescribed format by SEBI.