Tightening of corporate governance laws to keep managerial personnel on their toes

Key managerial personnel of India Inc will be on their toes before finalising the financial and secretarial reports for 2014-15, the first year for new and stricter corporate governance laws roll-out in the country.

Atul H Mehta, President of the Institute of Company Secretaries of India (ICSI), said company secretaries, chief financial officers and the managing directors were mandated to report serious irregularities or fraud directly to the Ministry of Corporate Affairs by the Companies Act, 2013. The Ministry is shortly expected to notify the nature of reportable irregularities or non-compliance. Moreover, secretarial audit in around 9,000 companies would also be mandatory this time around, he added.

The ICSI President said its members were prepared to take on new responsibilities.

The institute, meanwhile, has prepared secretarial standards to be followed by around 10 lakh unlisted private companies to raise their corporate governance practices. All registered private companies will have to follow improved corporate governance norms from July this year, he added.

Mehta said for the long-term needs of the profession, ICSI has decided to set up its first own educational course campus at Bhopal.

"The proposal is to have the residential campus for training greater number of students. The plan is to build the campus on around 100 acres of land,” Mehta pointed out.

ICSI has also proposed to set up its third centre of excellence in corporate governance in Kolkata. "We are scouting for 2 acres of land for the project," ICSI President said. The institute has set up such centres in Mumbai and Hyderabad.

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