Company Secretaries are on guard to shape the business environment
The change of guards at the center has introduced new terminology “More governance and less Government”, this enhanced adherence to norms of good corporate governance in today’s business environment in India. The focus of the management team shifted to qualified professionals who support and guide the management team in generating long-term added value for the shareholders and society at large. Those who are accountable to the shareholders for the companies’ long-term performance.
In a self-regulated regime, a Company Secretary (“CS”) subjected to a strict code of conduct is looked upon by the regulators. As an ethical and trustworthy professional whose professional judgment and competence have made a mark in the corporate sector. The portions below bring out how the company secretaries in India, over a period, have developed themselves as professionals. Having core competence in compliance matters and corporate governance, moving away from the traditional notions of CS of a given company.
A CS is recognized as a Key Managerial Person under the provisions of Companies Act, 2013 wherein they occupy a senior position and an integral part of the Board. CS are natural conscience keepers of the corporate sector with specialization in corporate governance, regulations, processes, and eyes of Board subject matters. The onus to ensure timely compliance of law is on them similar to other Board Members since they would be subject to “officer in default” under law.
- Despite a lot of respite on account of ease of doing business their core competence has become increasingly valuable since regulatory compliance in India is still a pain point across businesses.
- The new-age company secretaries are the helm of the journey, undertaking their roles diligently and going beyond in terms of responsibility
- Compared to its traditional notions, the scope of company secretaries in India has now become vastly different; the modern company secretary is an important cog in the business machinery
- Corporate governance and compliance matters are just one aspect.
- The new evolution of company secretaries sees them as advisors on various important matters related to law, mergers, and acquisitions.
The changing role of CS is very widening, a few of them as articulated below:
- Advising on foreign collaborations/setting up of joint ventures/subsidiaries in India or abroad
- Carrying out a plan for consolidation and diversification of the business
- Planning strategies for amalgamation/merger, acquisition, takeover, reorganization, restructuring, and winding up of companies
- Advising the management on post-merger, acquisitions, or restructuring strategies
- Advising on legal and procedural matters under the Companies Act and FEMA
- To act as Arbitrator and Conciliator and advising on the same
- Appearing as an authorized representative of the Company before the NCLT/NCLAT, Central Government, Regional Director, and Registrar of Companies
- To act as Secretarial Auditor, advisor, or consultant
- Advising on matters related to Intellectual Property
Company Secretary is experts in their own field about compliance enjoined under various statutes and rules, regulations, bylaws. And as a professional, a CS is always very careful and diligent while performing their duties. Not only to avoid any legal implications but also to adhere to the professional duties, and trust reposed on them by the management and the shareholders. Thus, increased roles and responsibilities for a company secretary in India, their accountability has also increased. Since CS professionals understand the law, therefore the shareholders and management of the company should rely on them for all such matters. To avoid any breach of compliance which would, in turn, result in sound conduct of affairs of the company.