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The new secretarial standards have not gone well with India Inc, which sees them as adding to the cost of compliance and even militating against the concept of ‘ease of doing business’.
The main challenge is that the two secretarial standards - which are mandatory from July 1 - are seemingly prescriptive and basically rules couched as standards in several areas, say several top corporate executives.
“Presentation as such is little confusing. The contents of secretarial standards at most of the places are reproduction of the provisions of the Companies Act 2013 and Rules there under”, P.K.Rustagi, Vice President (Legal) and Company Secretary, J.K.Tyre and Industries Ltd told Business Line.
Many of the requirements lack “business like approach” and seem to be designed to micromanage, Rustagi said, adding that they will only impede implementation of business decisions.
He highlighted the issue of resolutions passed through e-voting requiring proposer and seconder, which seems incongruent.
“Ever since e-voting has been made mandatory in case of certain class of companies, proposing and seconding the resolution by a member is not relevant where the resolution has already been put to e-voting.
As a matter of fact, result of e-voting is available on the date of the meeting itself”, Rustagi said.
However, Lalit Kumar, Partner, J Sagar & Associates, a law firm, and a member of the secretarial standards board (SSB) of the Institute of Company Secretaries of India (ICSI) had a different take.
Defending the two secretarial standards issued by the SSB, Kumar said that both these standards will enhance overall corporate governance by laying down in detail the methods and processes for holding board and shareholders’ meeting. .
“Our objective is not to make life difficult for corporates. We (SSB) are working hard to facilitate business”, he said.
Secretarial Standards are applicable to all companies regardless of their size and class i.e. including private limited companies, Section 8 companies (not for profit companies). The only exception is one person company.
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