New chief sees Company Secretaries taking on managerial role
The Institute of Company Secretaries Institute (ICSI) plans to develop a model for corporate governance rating, its newly elected President, S.N. Ananthasubramanian, has said.
The Institute will build on its existing insights and exposure to governance practices in terms of the Corporate Governance awards that it has been giving for the last 12 years.
“We had developed a questionnaire and critically evaluated companies for handing out corporate governance awards. All the collective wisdom will now be tapped to develop our own rating model for corporate governance,” Ananthasubramanian said in his first interview after assuming charge.
This ICSI’s plan to develop a corporate governance rating model comes at a time when market regulator SEBI has released a draft consultative paper on the issue.
In the draft paper, the Securities Exchange Board of India has said only credit rating agencies may be permitted to undertake corporate governance rating.
Asked about the SEBI paper, Ananthasubramanian indicated that ICSI may approach SEBI to permit “even others” to do the rating.
There is a debate in certain quarters on why credit rating companies alone are permitted to do corporate governance rating. It is felt that the regulatory framework should also allow other entities, such as stock exchanges, to rate corporate governance.
In India, stock exchanges are still considered as first-level regulators.
Meanwhile, the ICSI has chalked out a five-point action plan for the current year with the aim to equip company secretaries to meet the new requirements of the Companies Bill, 2012.
“We have to recognise the changed circumstances. When the context has changed, the text also has to change. We have to move from being ministerial to managerial. This is the role envisaged for company secretaries in the new Companies Bill,” he said, pointing out that a company secretary is part of the key management personnel in the new framework.
Ananthasubramanian wants company secretaries to adopt ‘responsible compliance’ as a mantra while being assertive and taking advantage of the enhanced role.
The Companies Bill seeks to provide ‘substantive oversight’ role to company secretaries as against a technical compliance role envisaged so far under the existing company law.
He also sees a scenario where a company secretary is appointed as a ‘chief governance officer’ in corporate India. “We want company secretaries to be moral beacons within corporate boardrooms”.
Besides coming up with a text book and a referencer on the new company law, ICSI will hold countrywide seminars on the Bill.
Plans are also afoot to use the television medium to create awareness about company law compliance. Training of directors will also get special focus, Ananthasubramanian said.