FROM THE VIEWSROOM. Making corporate life difficult

The Company Secretaries’ Institute needs to come clean on two new secretarial standards which are mandatory from July 1. Members feel these standards — one on general meetings and the other on Board meetings — need to be revised so as to ensure harmonisation with the Companies Act.

A case in point is the norm saying that directors can participate in discussions through electronic mode on restricted items such as approval of financial statements and Board reports if permitted by the chairman. This should be brought in line with the Companies Act, which does not permit certain matters to be discussed at a meeting held through video conferencing. Under company law, the chairman has not been granted authority to permit discussion on restricted matters.

To provide comfort to its members — many of whom fear turning into record-keepers post these standards — the ministry of corporate affairs needs to set up a special group to do a comprehensive review of the standards. Since more secretarial standards are in the pipeline, it would also make eminent sense for the MCA to think of setting up a body, like the one on accounting standards, to advise the government.

The recently constituted committee to review the new company law could recommend a suitable amendment in the Companies Act. Such a panel could, on a permanent basis, take care of members’ grievances around the formulation of secretarial standards.

The suggestion to have a special group review of the secretarial standards needs urgent attention if the MCA is to be saved from avoidable embarrassment.

KR Srivats Deputy Editor

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