The role of a company secretary has changed a lot in recent times. It has received immense attention in India after the value of good corporate governance has increased to become critically important in today’s world.
Change has been derived most notably by the Companies Act 2014 that has retained the need for a company secretary in private and public firms. Consequently, the role of a company secretary (abbreviated as CS) has evolved from a mere “note taker” at board meetings to the one who can take on a very critical role as a “Board advisor”. From serving the Board to taking an important part in the Board itself, a company secretary in today’s world has responsibilities for the organization’s corporate governance as well. Undoubtedly, company secretarial services in India have become vital than ever.
The Board, or particularly the Chairman, remains heavily dependent on the company secretary for key advices on directors’ statutory duties under the applicable law, requirements of the listing rules and disclosure obligations, as well as on corporate governance requirements, practices, and effective board processes. Corporate secretarial services in India are more specialised as the position has grown in importance by being one of the key governance professionals in any organisation nowadays.
Defining company secretary
One should not regard a Company Secretary as an employee of the company, but an entity with the power to fuel the growth of a company with his expertise knowledge in the Corporate Laws. While being master of the Company Law, he also understands the interpretation of Law. Therefore, it would be fair to say that a company secretary knows everything about Labour Laws, Banking Laws, Taxation Laws and all other laws that a company must follow.
Many corporate secretarial firms have highly competent professionals to offer services to organizations looking for these crucial roles.
While searching for definitions for a company secretary, one needs to go through Section 2(24) of the Companies Act 2013. It says that a Company Secretary means a Company Secretary as defined under Section 2(1)(c ) of the Company Secretaries Act, 1980
One can clearly feel that The Companies Act, 2013 doesn’t provide a clear definition, so one has to refer to the Company Secretaries Act, 1980 for the definition:
Section 2(1)(c ) of Company Secretaries Act, 1980 says, “Company Secretary” is a person who is a member of the Institute of Company Secretaries of India (ICSI).
So, primarily, one must have the Membership of ICSI to become a CS. To fulfil the requirements, a person needs to clear the exams that the institute conducts and should undergo the specified training.
An elaboration of the Corporate Secretary role
A company secretary’s role is extremely critical. The major responsibility is to maintain the legitimacy of the governance framework. Additionally, they are entrusted with roles to company’s effective management, maintaining legislative and regulatory compliance, and also to bring into action decisions taken by the Board of Directors.
In a broader sense, corporate laws are the main reason to keep the need for a company secretary in companies alive. Market regulatory laws as well as corporate governance requirements and procedures state that responsibilities of a secretary also include advising board and executives on various matters. In today’s world, specialist jobs of a company secretary appoint them as one of key governance specialists.
With the evolving boardroom dynamics, directors and executives feel the need for specific expertise through a top company secretary in India. For this, they rely on company secretarial services to support them in company management. Let’s go through a few key roles of a company secretary:
Statutory responsibilities of a company secretary
As per Companies Act 2014, applicable from 1 June 2015, it retains the requirement for a company secretary in both private and public sector companies. The retention of this requirement itself explains the importance of the role of the company secretary in front of the legislature. Indeed, the proposal goes further by making the Board of Directors responsible for hiring the secretary with the requisite knowledge and experience to serve the purpose of secretary of the company and to ensure maintenance as required by the law.
In a general sense, the company secretary is responsible to determine if the company complies with the company law, keeps certain statutory registers, and makes key filings with the Registrar of Companies, like annual returns, financial statements, and other forms pertaining to the changes to share capital.
In certain cases, they also help with private limited company registration process in India while staying abide by the applicable law and maintaining compliance.
Monitoring Organizational Governance
It is crucial for any company to maintain strong governance arrangements that are well-structured. A company secretary presents a broader view of the governance process while also ensuring that the governance and statutory reports remain in compliance with the relevant laws. Company secretarial service providers in India have the best professionals with the requisite expertise to ensure everything is done as per the law.
In this category, the role also includes determining if the code of corporate governance’s formal paperwork is right in place. It includes the Board presented Calendar of Matters.
Lending Support to Board and Executives
An important duty of the company secretary is to advise the Board of Directors on all applicable compliance matters. CS has to assess the governance mechanism followed by the Board to ensure if they are fit for the purpose. Based on their assessment, they discuss and propose any changes that may improve the governance practices. The company and the secretary work together as an entity to ensure a well-functioning Board of Directors.
Contributing to Board and Committee Processes
Good governance practices include the role of a company secretary. The professional plays a crucial role in maintaining good governance practices by helping the Board of Directors and its committee to effectively conduct their responsibilities and maintain compliance with the law to follow the best practices. In this reference, they are responsible for introducing high-quality practices while keeping the Board well informed about the processes and procedures of the company.
In this case, their role support directors to engage in board meetings actively, and also encourages the Board to make sound decisions. Apart from that, the company secretary can take care of follow-up activities and keep the management and directors aware of any issues that may appear later on. It also includes legal secretarial services and other things related to compliance.