The Securities and Exchange Board of India has mandated secretarial audits for all listed companies and "material unlisted" subsidiaries of such companies.
This has been done under its Listing Obligations and Disclosure Requirements (LODR) regulations with an objective of strengthening group oversight and improving compliance at group level, as recommended by the Uday Kotak committee on corporate governance.
It may be noted that the company law since 2014 already provides for such audits for listed and unlisted companies above a threshold.
Also, SEBI has now made it clear that company secretaries and CFOs are to be specifically considered as part of "senior management" and therefore their remuneration has to be recommended by the Nomination and Remuneration Committee of the Board.
Expert take
Speaking to BusinessLine , S N Ananthasubramanian, former ICSI President and a practising company secretary, said that this is a welcome move and a shot in the arm for the Company Secretaries profession.
Their mandatory inclusion along with CFOs as part of senior management recognises not merely their statutory role but also respects their responsibilities and status in overall board governance, he said.
“It is expected that Company Secretaries will honour this recognition by transforming themselves as governance professionals for enhancing board effectiveness”, Ananthasubramanian said.