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The Company Secretaries Institute would in the coming days issue several more Secretarial Standards as part of its efforts to raise "governance" levels in Indian companies and provide more comfort to foreign investors, its President Atul H Mehta has said.
On the anvil are secretarial standards on corporate social responsibility, registration of charges, managerial remuneration and winding up of companies, Mehta told Business Line in an interview here.
These will be in addition to the already issued two secretarial standards – on Board meetings and general meetings, which are mandatory from July 1 this year.
Mehta defended the statutory requirement of secretarial standards being applicable for "all categories of companies (except one person company)", stating that it was good for the country and its corporate sector.
"Adopting the secretarial standards will raise the governance levels in all companies and make them more sustainable. It would also send a right signal to all foreign investors, especially private equity funds and foreign institutional investors". Mehta said.
He also said adoption of these standards would give added protection to the company secretaries’ who could now face "class action" for any professional negligence.
"With class action suits now allowed under the Indian company law, it is better that our members are equipped to handle the new situation. Following secretarial standards will strengthen their position".
Mehta-who is also a member of the new Government appointed committee to review the new company law-said that the Institute of Company Secretaries Institute (ICSI) will before this month end issue ‘Guidance Notes’ for the already issued two Secretarial Standards (SS1 and SS2).
He also made it clear that it was not the intention of the ICSI to create hindrances to the functioning of companies by introduction of secretarial standards.
"We (ICSI) are always open to suggestions for changes to these standards if any. There is always bound to be some teething problems when something new is introduced", he said.
Currently, secretarial standards are mandatory on all categories of companies except one person company.
srivats.kr@thehindu.co.in
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