Move in sync with changes envisaged in Companies Act
Corporate Affairs Minister Sachin Pilot today said he would support Company Secretaries in their efforts to gain a bigger say in corporate governance.
He said the Government would move amendments in Parliament for a new nomenclature for company secretaries – governance professionals – should the Institute of Company Secretaries of India push for an amendment. He was speaking at the 41st annual convention of the institute here today.
The Institute has already set up a committee under former Supreme Court Judge B.N. Srikrishna to recommend changes to the Company Secretaries Act.
The move comes at a time when the Centre is looking to sharpen supervision of compliance procedures by corporates through the proposed National Financial Regulatory Authority. Pilot said a bigger role for Company Secretaries will help them “implement the new rules.” The Government recently released the third set of draft rules of the NFRA.
He said governance in the country is moving from “command and control” to a model that puts responsibility on the governing board in companies. “The terminology of ‘company Secretary’ does not reflect the new role envisaged in the new Companies Act.” The Institute is looking to help its 36,000 members graduate from compliance officers to “Governance Professionals.”
The new status will raise the standing of Company Secretaries, who have been included in the list of Key Management Personnel in the new Companies Act. M.J. Joseph, Additional Secretary, Ministry of Corporate Affairs, said the proposed National Company Law Tribunal offered opportunities for practicing CSs to become technical members in the Tribunal, after 15 years of practice.
They will assist in new roles such as corporate restructuring and winding up operations, which are far higher than their current contribution as compliance officers.
Besides that, their duty is to report frauds, and collaborate with internal and external auditors in ensuring legal compliance.
The ICSI has begun educating company secretaries about their new roles through seminars and speeches of experts on various new provisions in the Companies Act, 2013.