The new secretarial standards, issued by the Institute of Company Secretaries of India (ICSI), approved by the Central Government and notified in its gazette, have come into effect from July 1, 2015.
Section 118 (10) of the Companies Act ,2013, mandates every company to observe secretarial standards with respect to general and board meetings specified by ICSI.
To advocate the need, concept, scope of secretarial standards amongst corporates, ICSI organised a national seminar on secretarial standards here on Saturday.
Speaking to presspersons, Mamta Binani, Vice-President, ICSI said that around nine lakh active companies in India will have to comply with these secretarial standards to be fully compliant under the companies act. These standards would help doing business with ease, and improving governance, she said. The adoption of secretarial standards would result in building confidence in the minds of investors and improve compliance levels. These confidence building measures would help in bringing foreign investments by way of capital infusion, funding new projects, modernisation and expansion, Ms. Binani observed.
With sound and reliable corporate procedures in the area of decision making, these standards would boost the confidence of investors and would help the corporate world in achieving the Prime Minister’s initiative — ‘Make in India’ and ‘ease of doing business’ by providing benchmark on good governance, she said.
The ICSI initiated setting up Secretarial Standards Board (SSB) way back in 2000-01 to integrate, harmonise and standardise the secretarial practices prevalent in the corporate sector. According to Pavan K. Vijay, Past President ICSI and Chairman Secretarial Standards Board (SSB), 10 secretarial standards have been issued so far and some more under finalization. “The secretarial standards consist of a set of principles which the companies are expected to adopt and adhere to in discharging their corporate responsibility, leading to better corporate governance”, he said. All active companies (except one person company) in India will have to follow these standards, he said.
[The concept of One Person Company (OPC) is a form of business, introduced by the Companies Act, 2013, enabling entrepreneur(s) carrying on the business in the sole-proprietor form to enter into a corporate framework. OPC is a hybrid of sole-proprietor and company form of business, and has been provided with concessional/relaxed requirements under the Act].
According to Alka Kapoor, Joint Secretary, ICSI, many companies were voluntarily adopting secretarial standards and disclose in their annual reports with regard to compliance. Even one person companies where there were two or more directors would have to adopt these standards, she said.
At the seminar V. Ahalada Rao, Member, ICSI dealt with value creation by secretarial standards. Others addressed at the seminar included G.P. Madaan, Member, SSB, C. Ramasubramaniam, Council Member, ICSI, Nagendra D. Rao, Chairman, ICSI-Southern India Regional Council.
