The Board should ensure that the person appointed has the gravitas and objectivity to provide independent guidance and support at the highest level of decision-making in the company. Corporate principles come in the following forms: Corporations that do not abide by such principles could face litigation, court prosecution, or sanction from state officials. By following good corporate governance practices corporate earns or achieves best reputation in the world. World over, several committees and task forces have strongly advocated for corporate governance viz. The laws in governing a corporation are meant to protect the public and society. Further since so much of data and information are now required to be hosted on the website of the company and policies, etc which is being strictly watched by the regulators, taxation authorities, stakeholders and competitors, all the disclosure and information must be adequate, complete and accurate in all respect. Under state corporation laws, every public company is required to have a corporate secretary, and the individual who fills this role is a valuable member of the executive management team. In practice, the Company Secretary's job has expanded far beyond the minimum legislative duties. A key responsibility of the Corporate Secretary is to ensure that Board members have the proper advice and resources for discharging their fiduciary duties to shareholders under state law. Some could say that this focus has emphasized the company secretary's role in assisting with and supporting the governing and monitoring role of the board within their organisations. The company secretary is now an integral member of the governance team whose principal responsibilities include making sure the company complies with the law, ensuring specific statutory registers are kept up to date, and filing required documents with the registrar of companies. Today, the challenge of the pandemic [] Different institutions define corporate governance differently. The management of poor governance is attainable through cooperation and continued efforts regarding stakeholders and other areas. The company secretary in today's corporate environment is a senior officer with wide-ranging responsibilities who plays a critical role in the company's organisational structure. It is also incumbent on the corporation to treat locals who work for a company with respect and not unjustly absorb most of the natural resources of an area, with the locals seeing little benefit. This paper seeks to highlight the concept of Corporate Governance and the role of the Company Secretary in promoting good Corporate Governance. Attending the meetings of the company, Board of Directors and its Committees, rendering all necessary secretarial services in respect of the meeting and advising on compliance by the meetings with applicable rules and regulations; Maintaining the registers and other records required to be maintained by the company under this Act; Rendering proper returns and giving notification to the Commission required under this Act; and. Mitchell, Submission to the Cadbury Committee on the role of the Company Secretary in Corporate Governance, 16 JAS 118, 118-126 (2019). While the provisions for omnibus approval are the same, the regulations state that where the need for related party transaction cannot be foreseen and the details regarding the same are not available the audit committee may grant omnibus approval for such transactions subject to their value not exceeding Rs. In compliance with the Securities and Exchange Commission Act (No. The soul and core of corporate governance is not the conduct or behavior that we see on face of it. Both the listing regulations and the companies act, 2013 contain identical provisions with regard to the composition of the nomination and remuneration committee. Through effective communication, the board secretary can enable management to understand the expectations of and the value brought by the board and good corporate governance practices. This core role alone is becoming more challenging as the work of the board and its committees expands to meet the . Its up to governments as well as market participants to decide how these principles should be applied to develop their frameworks for corporate governance. In addition, corporate governance laws are designed to discourage mismanagement and fraud committed by corporations. Devendra. Rule 6a of the companies (meetings of board and its powers) rules, 2014 stipulates that all related party transactions shall require the approval of the audit committee after the same is approved by the board of directors. Under law, CS has a critical role to play in organizing and implementing boards decisions, its committees, general body meetings. Ashish M. Shaji has done his graduation in law (BA. "The duties formerly held by the company secretary in organisations which have since chosen not to have one become the responsibility of the board, or sometimes that of the general counsel. According to Section 204 of the Companies Act 2013, it is the duty of the Company Secretary in practice to perform the secretarial audit of every listed company. With the increasing focus in recent years on corporate governance, the role of the company secretary has grown in importance. That said, the role lies at the heart of the governance systems of quoted companies and is receiving ever greater focus. The Secretary also has a role to play in ensuring that the meetings are held and also take measures to ensure compliance with the resolutions, actions points and report on matters arising. What Is Sarbanes Oxley and Corporate Governance? Company secretaries all over the world have been assigned the responsibility for good corporate governance practices to be followed by the companies where they work or for their clients by the institute of company secretaries of india. Corporate governance also affords a structure in which the goals of a company are determined, including the ways of obtaining such objectives and the monitoring of performance where necessary. Board support responsibilities include: Calendaring meetings, deadlines, and many other matters for the board and its committees. In addition, corporations must attract the necessary capital by issuing stock to raise quick cash. Here the role of a company secretary is to ensure that he/ she develop the code of conduct for the board of directors in consultation with the top management of the company. The Board is confident that it is applying the QCA Code across the main areas of delivering growth, maintaining a dynamic management framework and building trust. According to the Cadbury Report that the company secretary has a key role to play in ensuring that board procedures are both followed and regularly reviewed. Emphasis is laid on the fact that the Chairman of the Board mostly relies on the company secretary for guidance on his responsibilities under relevant laws governing the business world. Handling the logistics of live parent and subsidiary board . Further the regulations state that the approval shall be valid for a period not exceeding one year and fresh approvals shall be taken after the expiry of one year, but rule 6a states that the approval shall be valid for one financial year and fresh approval shall be taken after the expiry of the financial year. The core roles are identified, relevant in terms of the historic development of the office and the South African specific definition of corporate governance, to be tested against practice by way . Our Upanishads mentioned the hierarchy of human needs and different layers along with the levels of needs. Where the Company Secretary is an employee of the company, he should be a member of senior management and should be appointed through a rigorous selection process similar to that of new Directors. It mainly involves balancing interests of a companys stakeholders like shareholders, management, customers, financiers, government, and the community as well. When it comes to globalization, many companies are finding themselves in a new role around the world when entering new markets. Providing the directors of the company collectively and individually with guidance as to their duties, responsibilities and powers The company secretary plays a role in facilitating the development of the Board. The Companies Act recognizes the position of CS as an officer of the company in its administration as well as legal compliance. Further the listing regulations have also mandated a quorum for the audit committee meetings, which shall be either two members or 1/3rd of the members of the committee, whichever is greater with at least 2 independent directors. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. A Company Secretary (CS) has a critical role to play in companys administration. While a blanket limit has been specified by the regulations, the act lays down individual limits for each of the related party transaction specified under section 188 of the act. ***** document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Congratulations! For is compliance board of directors shall provide affirmation to the compliance of the code at each and every first meeting of the board held in each financial year. With the increasing rate of Boardroom dynamics, management of Companies are realising the need for company secretaries to provide this expertise, specialised skills and technical knowledge in the area of advising and guiding the Board to ensure full compliance with the law. Corporate governance rests with the vision and perception of the leadership and a leader need to adopt a vision for corporate governance. We have to leapfrog over existing technologies rather than incrementally improve them. LLB) from CCS University. Often, company secretaries also serve as chief advisers to the board of directors, providing advice and guidance on corporate governance and corporate planning. On the other hand Section 134(3) of the companies act, 2013 states that all the companies must have a risk management policy, which shall be responsible for identification of risks which in the opinion of the board may threaten the existence of the company. In addition, the Company Secretary should advise the Chairman on the integration plans or strategies for new directors and training plan for individual directors. The Secretary is liable to both the company as well as the shareholders, creditors, employees, consumers, society, regulatory, and the Government. Therefore, companies that engage in such unlawful conduct face public backlash and consequences from officials. Business people as well as general public expect good business ethics and effective corporate governance from the business leaders. The office of a Company Secretary is a unique position of considerable influence at the centre of administration and operations of an organisation. The primary goal is to place an equal interest between society, corporations, and individuals. The team specialises in supporting clients on all aspects of governance, transactions and compliance and are front of UK and global corporate governance reforms, providing market leading thought leadership in the industry. The regulations further stipulate that the code shall incorporate the duties of the independent directors as laid down in the Companies Act, 2013. Stake holders include the following parties: The management of bad governance can come if the following forms: If you need more information on a company secretary and corporate governance, post your legal need on UpCounsels marketplace. Company secretary has to ensure that the proper facility for video conferencing has to be provided by the company and proper data shall be maintained after conclusion of the meeting. Centralize the data you need to set and surpass your ESG goals., The Big Shift: How Boardrooms Are Evolvingand How Leaders Should Respond. The core responsibilities of a Company Secretary/Governance Professional. It the responsibility of the company secretary to conduct the annual general meeting of the company. The corporation therefore performs with efficiency by operating under governance guidelines through the generation of long-term value. Was this document helpful? For instance, a Company Secretary in Nigeria must ensure that the provision of (CAMA) and other laws regulating the companiess activities are adhered toAdditionally, the Secretary must ensure a timeous implementation of the Directors/ Management decisions. Some of the key roles played by the Company Secretary include; The company secretary plays an important role in good governance by assisting the Board of Directors and its committees in effectively carrying out their duties. Also, corporations must assess its role in the larger community as a whole and its making of a beneficial impact on people. Corporations, whether through family-based companies or state firms, operate with parameters that are established via state law and through various regulations. The Company Secretary plays a significant role in company administration and performs a three-fold function as a statutory officer, coordinator, and an administrator of a Company. A company secretary also plays the role of a chief advisor to the board of directors on best practices in corporate governance and helps the organization in managing legal matters. Thus the company secretaries are not only compliance officers and kmps of the company but they are corporate professionals of the company governing the companys core area. Regardless of globalization, a corporation should act in the same ethical manner as if operating on a local or national scale. A company secretary is responsible for notifying the SSM of such changes and update all related company documents that are kept in the registered office. The job of the company secretary is to ensure good governance In case the non-executive chairperson is a promoter or related to the promoter or any other person occupying management position in the board of directors or at one level below the board of directors, at least of the board of directors shall comprise of independent directors. 4) 2008 Section 89/15 and 89/16, the Board of Directors has appointed Mrs. Pilasphan Udomjarumanee Senior Vice President - Corporate Secretary and Legal In performing this duty, the Corporate Secretary has the following roles and responsibilities: Arranging meetings for the Board of Directors, Management Committee and AGM as . Communication. The company secretary should play a key role in the induction process of new directors, encompassing both directors' duties and responsibilities in general and specific matters pertaining to the company itself and the industry in which it operates. The principles of Corporate Governance which are usually issued in the form of Codes, are a set of guidelines which essentially direct the activities and ethics of a company. Recently, in 2018, The Nigerian Code of Corporate Governance 2018 was issued to effectively institutionalise Corporate Governance best practices in Nigerian companies. Interestingly company secretaries assumes pivotal role in both corporate compliances and implementation of corporate governance codes. Also a CS has to ensure that the same information is disclosed in the annual report of the company as well it shall be placed on the website of the company. Corporate governance is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management of the company and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders of the company. Through the use of the Companies Act and the Kings report the company secretary ensures directors are kept abreast of relevant legislative and regulatory developments. When it comes to secretary and corporate governance, they are measures in which companies should operate to benefit owners and society at large. While we may think that a company secretary job is purely clerical or secretarial, in reality, a company secretary is more than that. The concept of corporate governance is complex but the principles on which it is based are straight-forward. Company Secretary and Corporate Governance, Corporate Governance Law: Everything You Need To Know, Importance of Corporate Law: Everything You Need To Know, Difference Between Corporate and Non-Corporate. We will be making a separate submission on the detailed recommendations contained in the report of your Committee at a later date. Financially literate has been defined to mean the ability to read and understand basis financial statements and having accounting or related financial management expertise is defined to mean having requisite professional certification in accounting or any other comparable experience or background which results in the individuals financial sophistication including being a CEO or CFO or such other senior officer with financial oversight responsibilities. He/ she now makes valid representations on behalf of the company and is actively involved in the managerial activities of the company. These challenges will bring about economic discontinuities that are unprecedented in scale and scope, and would require highly innovative approaches. The Essential Company Secretary Overview of the Guide: A member serving as a company secretary is regarded as both an officer and part of the senior management team, and at the center of the board's decision-making process. The regulations, however, state that all the related party transactions shall require the prior approval of the audit committee. In practice, the role of the company secretary has developed into much more than the basic statutory requirements outlined above. Here the role of the company secretary is to oversee whether the composition of the board is in conformity as per the provisions of the companies act as well as listing regulations. The regulations require the disclosure of all related party transactions in the quarterly corporate governance compliance report submitted to the stock exchange while such a similar requirement has not been stipulated in the Companies Act, 2013. Likewise, government also need to shape an effective regulatory framework that gives enough flexibility to permit markets to function effectively and respond to shareholders expectations and other stakeholders. The responsibilities of the company secretary have been limited only to assisting and supervising board workflows, which can be seen in these areas: Preparing and documenting board and committee meetings. The listing regulations states that the board of directors shall constitute a risk management committee for the top 100 listed entities determined on the basis of market capitalization as at the end of the immediate previous financial year. Read our article: Appointment of Key Managerial Personnel under Companies Act, 2013. Corporations, whether through family-based companies or state firms, operate with parameters that are established via state law and through various regulations. Ensuring that the company complies with secretarial standards. The legal and regulatory components of Statutory Compliance. Under CAMA, section 298 highlighted the duties of the Company Secretary as follows: Role Of A Secretary In Promoting Good Corporate Governance. Save my name, email, and website in this browser for the next time I comment. By institutionalising the corporate governance standards, the Code has effectively rebuilt public trust and confidence in the activities of companies as well as guaranteed the fair and transparent trade and investment. Understanding The Tax Obligations And Liabilities Of Companies In Nigeria. A company . Reviewing, preparing, and distributing board materials containing substantial background information to assist with board and committee meeting preparation. D.S. Jarwal, The Role of Company Secretary as Governance Officer . Here the role of a company secretary is to ensure that he/ she develop the code of conduct for the board of directors in consultation with the top management of the company. The role of CS includes advising the Company's Board of Directors of the Company on good corporate governance practices and compliances with the rules and regulations. According to the Companies Act, 2013 major roles of a company secretary are:- Firstly, to assist the board in the conduct of the affairs of the company. Collaboration. Therefore, owners operate with various incentives to remain in business by operating the company in an equal and just manner. The Chairman of the Board acknowledges his leadership role and responsibility in promoting good corporate governance for Zambeef. Copyright 2022 ENTERSLICE PRIVATE LIMITED. Learning Compliances Role of Company Secretary in Corporate Governance. The position of the company secretary avails them the opportunity of having a holistic view of the governance framework, thus, it is the generally responsibility of a Company Secretary to ensure that the frameworks and any supporting policies and procedures are clearly documented for ease of reference by the management.
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