The Hindu Business Line : Secretarial standards must be mandatory: ICSI

INDIA Inc could soon have laid down procedures for better compliance of corporate governance, if the proposal mooted by the Institute of Company Secretaries of India (ICSI) to make mandatory secretarial standards (SS) issued by it is accepted by the Government. The institute desires that the SS should be treated on the lines of accounting standards (AS) issued by the Institute of Chartered Accountants of India (ICAI).

The ICSI has already put forward this view to the Ministry of Company Affairs (MCA) and plans to take it up with the Capital market regulator, Securities & Exchange Board of India (SEBI).

Speaking to Business Line shortly after assuming office as the ICSI President, Mr R. Ravi, said, "If such standards on various secretarial practices prevalent in the corporate sector are made mandatory, it will improve the India Inc's compliance of corporate governance norms. Besides, bigger corporate houses such as the Tata Group are adopting some of these standards."

In fact, the institute is open to the idea of a national advisory committee on accounting standards (NACAS) like a body to examine the SS issued by the ICSI, Mr Ravi said.

During 2000-01 the institute had decided to set up a secretarial standards board (SSB) to integrate, harmonise and standardise various secretarial practices prevalent in the corporate sector.

The institute has issued three SS till now — (SS-1) Secretarial standard on board meetings, (SS - 2) Secretarial Standard on General Meetings, and (SS - 3) Secretarial Standard on Dividend.

The Secretarial Standard on Registers and Records (SS-4) and Guidance Note thereon is being finalised and will be issued shortly, the President said.

Secretarial standards on managerial remuneration, loans and investments, directors, related party transactions, investor servicing, are under consideration of the SSB. "We would like to come out with two or three a new standards every year," Mr Ravi said.

Regarding the other issues the institute would be concentrating upon, he said, "In order to give an international identity to the company secretaries profession, the council of the institute has passed a resolution to move the Ministry of Commerce for introduction of a separate head to the corporate governance and company secretarial services under the Services Sectoral Classification of the WTO in concert with the professions in other countries."

"I wish to make this a focal point of the institute's agenda this year. I am aware this is a tough and long drawn out process. But its strong pursuit is essential in order to get a global recognition to our profession," he stated. Further, the institute has also sought Government approval for setting up international federation of company secretaries.

On the aspects of partnership with other professionals, Mr Ravi said that, in principle, there is an agreement in the three Institutes for the partnership between the practicing members, which would form multi-disciplinary firms. This, however, would be possible only after acts governing the profession of chartered accountants and cost and works accountants are suitably amended.

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