The enactment of Companies Act, 2013 was the dawning of a new era of corporate governance in India. Transparency, accountability, and compliance were the main pillars that it stood on, and the person who as ensuring these aspects is company secretary (CS).
This article carries on with the topic of the role of the CS within the Act and brings into view their functions and stresses the significance of their responsibility to the company.
From Administrative to Strategic
Earlier the role of the company secretaries were considered as secretaries who only perform the administrative tasks such as maintenance of board meeting guidelines and registration of legal documents.
Nevertheless, the job description of the act of war shifted from just clerking to a more strategic position. A CS stands at Section 2(51) of the Act as a ‘Key Managerial Personnel’ (KMP) being the highest placed senior authority in charge of important functions in the company’s smooth running.
Cornerstone of Compliance:
1. Compliance Reporting: The CS should provide a regular report with compliance status to the board in which he will refer to a risk of any deviations of compliance and offer corrective measures.
Thus, being a proactive compliance management policy, allows a company to identify and deal with compliance issues in time, and prevent fees and reputational damage.
2. Secretarial Standards: Under the Act, rules as provided under the ICSI’s secretarial standards is required to be complied with. The standards which cover matters such as the board meetings, general meetings, disclosures, and the statutory meetings records are included in these.
Keeping to these regulations the Board of Directors is able to create a company with the top level of corporate governance.
3. Liaison with Regulatory Bodies: The function of CS is to provide a linkage between the organization and different regulatory bodies such as the boards of directors, the shareholders and the government which helps in timely submission of documents, returns and applications.
This function requires the CS to follow the entire quick changing regulatory arena and to assure the company complies with all the applicable legislation. Communicating with regulators properly negates the possibility of incurring penalties and bearing unwanted risks of the delays.
Guardian of Good Governance:
1. Board Advisory: Through the CS the department provides the board of directors with legal and procedural-type advice in the area of board meetings, decision making, and directors’ duties.
The experience that they possess makes sure that board meetings are being undertaken in a proper manner, the procedures are followed by the necessary rule and the directors perform their fiduciary responsibilities.
2. Stakeholder Communication: The CS, along with the government, financial institutions, and other stakeholders of the company, has a critical role of ensuring that communication with these parties is smooth and efficient.
It would include preparing and delivering annual reports, responding to shareholder questions, and rapidly transmitting any material information.
A proper communication with stakeholders will improve a level of trust and transparency which are the fundamental characteristics of a good corporate governance.
3. Ethical Conduct: The CS serves as the ethical practices ambassador in the corporation, establishing ethical standards and ensuring compliance with CSR policies.
This could entail the creation and execution of an ethical code of conduct for the company, the taking on role of overseeing CSR initiatives and finally the assurance of transparency in reporting these activities.
Through establishing ethical actions, then the CS allows the firm to create a good image and engage investors with good conscience.
Facilitator of Effective Functioning:
1. Meeting Convening: The secretary shall call and preside over all board meetings and both the regular membership meetings are being properly announced and all legal procedures are being followed.
This may simply entail preparing agendas, distributing meeting materials, and organizing the logistics. The meeting organizations like this become more synchronized and decisions are made with stronger adherence to corporate governance principles.
2. Minute Taking: They keep consistent and a complete record of board meetings and general meetings, giving a historical perspective of the company decision-making process.
This record not only consist of the talks that took place but also the motions made and called for votes. They are not only important for creating outer transparency and accountability, but they are a way for the organization to be more responsible in the sense of its work.
3. Issuance of Shares and Debentures: The Department of shares is in charge of issuing and managing issuing and managing the company’s shares and debentures, enforcing compliance with the laws implementing it.
Such function will be ensured by keeping a register of the shareholders, which includes transferring of shares, and disclosure requirements related to share issuance. An effective management of shares, debentures and other financial instruments likewise provides the investors with the assurance that the company retains sound capital structure.
Conclusion: A Pillar of Corporate Governance
In terms of amendments made to the Companies Act of 2013, company secretary has now been given much more importance. CSs are not just the administrative team but are also important pillars for legal compliance, ethical conduct, and good governance which the company must show a dedication to.
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The function they play is exceptionally useful for the interests of all the stakeholders and also in the building of a sustainable business community. Then companies which run the risk of dealing with the very complex regulatory environment, the qualified consultation and direction of an expert in CS become more and more essential.
