Secretarial Standard

42 nd National Convention of Company Secretaries21-22-23 August , 2014

Dream

A Dream seen in 2000 came true in 2014

Divergent Practices

unique and pioneering step towards standardization of diverse secretarial practices

Meaning

documents relating to various aspects of

secretarial practi in the corporate sector. Integrate

HarmonizeStandardize

Policy

Secretarial Practices

Companies Act 2013 – Recognizing Secretarial Standard

• Section 118(1 General and Board

meetings

• Section 121 - Preparation of report

on the Annual General Meeting

• Section 205 - Function of the

Company Secretary (CS) includes

ensuring that the company complies

with the applicable Secretarial

Standards.

Section 118(10)

Section 121

Section 205

Scope

• In conformity with the provisions of the applicable laws• Supplement such laws, rules and regulations in the

direction of promoting better corporate governance.

Scope - General

the applicable laws,

business environment,

usages,

practical applicability and

the best secretarial practices prevalent keeping in view the governance aspect

Purpose

Growth and enhanced

visibility of the profession

Integration

Harmonization

Standardization

Uniformity

Systematic

Need of Secretarial Standard Board

To address areas where:

• Law is Silent

• Law is Ambiguous

• Law has multiple meaning

Law is Silent

Law is Ambiguous Law has multiple

meaning

So as to bring more clarity & recommend good governance practices

Principles

Multi Legal-

Interpretation /

Non clarity

Judicial

Pronouncements Best

governance

Industry Practices – Best

Practices

Address Overlapping / Contradiction

with other laws (Multiple

Regulators)

Legal Clarity v/s

Language Clarity

Typical Scenarios/Sit

uations covered

Advantages

• Better corporate governance• Improvement of Qualitative

secretarial practices • Adoption of uniform, consistent

and best secretarial practices • Transparency • More recognition to the CS• Increasing Professionalism

Process of Formulation of SS

360 degree Standardized Procedure• in a transparent manner;• after extensive deliberations,

analysis, research; and • after taking views of corporates,

industry, regulators and the public at large.

Secretarial Standard Board

Outcome

No. SS No.

SS Name Month & Year of Publication

Month & Year of Revision, if any

1 SS-1 Secretarial Standard on Meetings of the Board of Directors

December, 2001 June 2007

2 SS-2 Secretarial Standard on General Meetings May, 2002 October 2011

3 SS-3 Secretarial Standard on Dividend May, 2003 -

4 SS-4 Secretarial Standard on Register and Records October, 2005 -

5 SS-5 Secretarial Standard on Minutes September, 2007 -

6 SS-6 Secretarial Standard on Transmission September 2007 -

7 SS-7 Secretarial Standard on Passing Resolutions by Circulation

November 2008 -

8 SS-8 Secretarial Standard on Affixing of Common Seal November 2008 -

9 SS-9 Secretarial Standard on Forfeiture of Shares November, 2008 -

10 SS-10 Secretarial Standard on Board's Report July, 2009 -

Outcome

S.No. Guidance Note Name Month & Year of Publication

Month & Year of Revision, if any

1. Meetings of the Board of Directors July, 2002 -

2. General Meetings November, 2002 -

3. Passing of Resolution by Postal Ballot September, 2002 September 2012

4. Dividend May, 2003 -

5. Buy Back of Securities December, 2003 -

6. Board’s Report July, 2004 -

7. Preferential Issue of Shares December, 2007 -

8. Corporate Governance Certificate (Clause 49 of Listing Agreement)

October 2005 September 2007 and

July 2010

9. Listing of Corporate Debt July 2010 -

10. Related Party Transactions July 2010 -

11. Board Processes December 2010 -

12. Non Financial Disclosures May 2011 October 2011

International Scenario

• ICSI is the pioneer

• Vision is to promote SS Internationally

Present SS 1 – Meeting of Board of Directors

• Law is Silent - certain good governance practices are recommended– Who has the power to adjourn the meeting?– Time for serving of agenda

• Law is Ambiguous - more clarity is brought in– Video conferencing for directors, if company makes

it available– Interested Director for the purpose of Quorum

• Law has multiple meaning– Prohibition of board meeting on national holidays– Directors participation through electronic mode in

restricted items

Present SS 2 – General Meetings

• Law is Silent - certain good governance practices are recommended– Whether AGM can be postponed or cancelled ?– Whether Secretarial Auditor compulsorily attend

general meeting? If so, which GM?

• Law is Ambiguous - more clarity is brought in– How to consider proxy, if one proxy is appointed for

more than 50 members?– Electronic ballot in postal ballot cases???

• Law has multiple meaning– Whether voting at the Meeting is mandatory for

companies providing e-voting?– Casting Vote

Enhancement of role of CS

• Position of Company Secretary

• Authority to convene Board Meetings and issue notice in this regard

• In case of Board Meetings, only CS is in attendance.

• Facilitate convening and holding of meeting of Independent Directors,

• Minutes shall be kept in the custody of the Company Secretary.

Steps to prevent oppression & Mismanagement

• Proof of sending and delivery of Notice & Agenda to be maintained

• Copy of the signed Minutes certified by the Company Secretary shall be

circulated to all Directors

• Quorum shall be present not only at the time of commencement of the

Meeting

Our Responsibility so that people have faith in Corporate Structure

Future Plan

• Win the Company through Agenda, Minutes, ATR

Minutes – Is it a book ?

• No it’s a decision making process

Future Plan

• Revising all existing Secretarial Standards • Revising all existing Guidance Notes

Future Plan

Guidance Note on RPTs (incl. Loans & Advances by a company)

Guidance Note on CSR (under Companies Act, 2013)

Guidance Note on Independent Directors

Guidance Note on Video Conferencing

Guidance Note on Annual Returns

Ambitious Plan

Structured Agenda/Minutes/ATR

Uniform MIS

Beneficiaries

• Independent Directors• Company Secretaries• Companies• Board

Cascading Effect

Better Governance

Simplified Process

Focus on Strategies

Uniform practices

More recognition

Lets make Secretarial Standard a success

mantra for Corporate Board

And create Good Governance