{"id":110169,"date":"2022-09-23T12:52:23","date_gmt":"2022-09-23T07:22:23","guid":{"rendered":"https:\/\/legalwindow.in\/?p=110169"},"modified":"2022-09-23T13:08:30","modified_gmt":"2022-09-23T07:38:30","slug":"evolving-role-of-company-secretaries","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/evolving-role-of-company-secretaries\/","title":{"rendered":"Does the evolving role of Company Secretaries full of Challenges and Opportunities?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-110190 size-full\" title=\"Evolving Role of Company Secretaries\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Does-the-evolving-role-of-Company-Secretaries-is-full-of-Challenges-and-Opportunities-1.png\" alt=\"Evolving Role of Company Secretaries\" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Does-the-evolving-role-of-Company-Secretaries-is-full-of-Challenges-and-Opportunities-1.png 1200w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Does-the-evolving-role-of-Company-Secretaries-is-full-of-Challenges-and-Opportunities-1-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Does-the-evolving-role-of-Company-Secretaries-is-full-of-Challenges-and-Opportunities-1-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Does-the-evolving-role-of-Company-Secretaries-is-full-of-Challenges-and-Opportunities-1-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Does-the-evolving-role-of-Company-Secretaries-is-full-of-Challenges-and-Opportunities-1-768x403.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/>A key expectation of members of self-governing professions is that they accept legal and ethical responsibility for their work and put the interests of the public and society first. One of the essential features of the profession is to adhere to strict codes of conduct maintaining strict ethical and moral obligations. In the self-regulated regime, the company secretary (hereafter referred to as &#8220;CS&#8221;), who is subject to a strict code of conduct, is viewed by regulators as an ethical and trustworthy professional whose professional judgment and competence have made a mark in the corporate sector. This article discusses the changing role of the company secretary.<\/span><\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"border: 1px solid #555;\"><b>Table of Contents<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#by\"><span style=\"font-weight: 400;\">Overview of corporate governance by a Company Secretary<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Statutory\"><span style=\"font-weight: 400;\">Statutory liability<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#in\"><span style=\"font-weight: 400;\">Functions of company secretaries and their responsibilities in the corporate world<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#for\"><span style=\"font-weight: 400;\">Company Secretary&#8217;s responsibility for compliance<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#of\"><span style=\"font-weight: 400;\">Increased burden of regulation<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#a\"><span style=\"font-weight: 400;\">Some responsibilities and roles of a Company Secretary<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#Final\"><span style=\"font-weight: 400;\">Final words<\/span><\/a><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"by\"><b>Overview of corporate governance by a Company Secretary<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">In particular, the Companies Act 2014 retained the need for a company secretary in both private and public companies. The responsibilities of the modern company secretary have evolved from being a &#8220;note taker&#8221; at board meetings or an &#8220;administrative employee of the board&#8221; to one that includes a much broader role of &#8220;advisor to the board&#8221; and responsibility for the organization&#8217;s operations and corporate governance.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Board of Directors, particularly the Chairman, rely on the Company Secretary to advise them not only on the statutory duties of the Board of Directors under the Act, disclosure obligations, and rule requirements but also on corporate governance requirements and procedures and effective Board processes. This specialized role of the modern company secretary has emerged to position them as one of the key management experts within the organization.<\/span><\/p>\n<h2 id=\"Statutory\"><b>Statutory liability<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The Companies Act 2014, which came into force on 1 June 2015, retains the requirement for a company secretary, unlike UK legislation which removed this requirement for private companies in 2006. The retention of this requirement demonstrates the importance of the company secretary&#8217;s role in the eyes of the legislature and the proposals go a step further by transferring responsibility to the board of directors for ensuring that the secretary has the necessary knowledge and experience to perform the company secretary&#8217;s functions and to keep records as required Act. In addition, the company secretary will be required to sign a statement on the appointment confirming the existence of the secretary&#8217;s duties.<\/span><\/p>\n<h2 id=\"in\"><b>Functions of company secretaries and their responsibilities in the corporate world<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">A company secretary is a qualified professional member of the Institute of Company Secretaries of India (ICSI), a statutory professional body in India to promote, regulate and develop the profession of company secretaries in India. A CS professional is recognized as a Key Management Personnel (KMP) under the provisions of the Companies Act 2013, where they hold a senior management position and are an important part of the company\u2019s board.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">CS professionals are natural conscience keepers for the corporate sector as they are specialists in corporate governance, regulations, and processes, and are the eyes and ears of the board on these matters. They are a bridge between the company and its board of directors, shareholders (owners), other stakeholders, and regulatory authorities. The CS is the officer responsible for compliance with any legal requirements under various pieces of legislation, including the Companies Act 2013, which applies to companies. Since it is the CS who is also the &#8220;officer in default&#8221;, the onus to ensure timely compliance with the law is on her as it is on any board member.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another vital role of the CS is to provide the director(s) of the company, collectively and individually, with such guidance as they may require regarding their duties, responsibilities, and powers. This is an essential function of the company secretary, as it is she who informs the members of the board of directors about their required roles and powers, as envisaged by company law, and at the same time assists the board of directors in negotiations and company affairs. CS plays a key role in ensuring compliance and regular review of board procedures.<\/span><\/p>\n<h2 id=\"for\"><b>Company Secretary&#8217;s responsibility for compliance<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">In today&#8217;s complex regulatory environment, it is paramount to have compliance as a top priority for all businesses. With an ever-changing and evolving regulatory environment, the margin for error is very thin. Company secretaries have a legal duty to guide the board in meeting their regulatory responsibilities in all aspects of the business while always following best practices. Taking a proactive approach to compliance with planning for important compliance matters can help the board respond to these matters and act on them promptly.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A company secretary&#8217;s compliance responsibilities typically include:<\/span><\/p>\n<p><strong>At board level<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Board Management Processes \u2013 Management of the meeting process and distribution of all board documents and proposals to all board members for consideration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure that all relevant meetings are properly scheduled and conducted as per schedule.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensuring members\u2019 records and directors&#8217; minutes are kept in compliance<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Administration of benefits and pensions<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Advising directors on legal and regulatory requirements<\/span><\/li>\n<\/ul>\n<p><strong>At the corporate level<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Managing all compliance policies, processes, and procedures<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensuring the establishment and proper management of the necessary registers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensuring that the company adheres to its legal obligations<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensuring the company&#8217;s financial records are maintained and reports are prepared following legal requirements<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tax returns filing and financial statements auditing.<\/span><\/li>\n<\/ul>\n<h2 id=\"of\"><b>Increased burden of regulation<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">In light of economic developments in recent years, corporate stakeholders, particularly in the financial services sector, are increasingly involved in managing corporate affairs, and it is therefore essential that best practices are always followed. The demand for higher standards in this sector can be further demonstrated by the introduction of several corporate governance codes by the central bank, including standards of fitness and integrity for certain regulated functions or persons who exercise regulated functions before approval.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While compliance monitoring in the financial services sector has traditionally been outsourced with the introduction of these new standards, there is greater caution in providing such services. It is true that the company secretary&#8217;s role includes informing the board of new legislation and how it applies. With this increased focus on corporate governance, the role of the company secretary has been expanded so that the secretary is now seen as the guardian of the company&#8217;s compliance with legislative requirements and best practices.<\/span><\/p>\n<h2 id=\"a\"><b>Some responsibilities and roles of a Company Secretary<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">It is necessary to note that CS roles and responsibilities are expanding and a few of them can be clarified as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Consultancy in the field of foreign collaboration\/formation of joint ventures\/subsidiaries in India or abroad<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Implementation of the business consolidation and diversification plan<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Merger planning strategy, acquisition, takeover, reorganization, restructuring, and<a href=\"https:\/\/legalwindow.in\/liquidation-process-of-a-company\/\" target=\"_blank\" rel=\"noopener\"> liquidation of companies<\/a><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Management consulting on strategies after mergers, acquisitions, or restructuring<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Advice on legal and procedural matters under the Companies Act and <a href=\"https:\/\/www.rbi.org.in\/SCRIPTs\/BS_FemaNotifications.aspx?Id=183\" target=\"_blank\" rel=\"noopener\">FEMA<\/a><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To act as arbitrator and conciliator and to advise on the matter<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Acting as an authorized representative of the company before NCLT\/NCLAT, Central Government, Regional Director, and Registrar of Companies<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Advice on intellectual property matters<\/span><\/li>\n<\/ul>\n<h2 id=\"Final\"><b><a href=\"https:\/\/legalwindow.in\/start-up-registration\/\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-110191 size-full\" title=\"Startup Registration \" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Get-your-Startup-registration-by-experts.-2.png\" alt=\"Startup Registration \" width=\"1000\" height=\"200\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-your-Startup-registration-by-experts.-2.png 1000w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-your-Startup-registration-by-experts.-2-600x120.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-your-Startup-registration-by-experts.-2-300x60.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Get-your-Startup-registration-by-experts.-2-768x154.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a>Final words<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">CS are specialized experts in the issue of compliance mandated by various laws and rules, regulations, ordinances, and directives under them. And as a professional, a CS should be very careful and diligent in the performance of their duties, not only to avoid any legal consequences but also to uphold professional standards, professional duties, and the trust placed in them by management and shareholders.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thus, as the roles and responsibilities of company secretaries in India have increased, their responsibilities have also increased. Since CS professionals understand the intricacies of the law, shareholders and company management should rely on them in all these matters to avoid any breach of regulations that would subsequently lead to the proper management of the company&#8217;s affairs.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A key expectation of members of self-governing professions is that they accept legal and ethical responsibility for their work and put the interests of the public and society&hellip;<\/p>\n","protected":false},"author":9,"featured_media":110189,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-110169","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-miscellaneous"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Evolving Role of Company Secretaries &#187; 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