As we all know that The Institute of Chartered Accountants of India (ICAI) has listed out numerous accounting principles and rules which are to be followed by the auditor fraternity while auditing the organizations they are appointed to audit for. ICAI has also introduced the Accounting Standards, most popularly called as 'AS' which are supplementary to the accounting rules and norms.
Likewise, The Institute of Company Secretaries of India (ICSI) has also long back introduced some set of rules and norms, which are supplementary to the Companies Act, 1956, called as 'Secretarial Standards' and popularly termed as 'SS'.
ICSI has been the first professional body in the world to start the process of setting Secretarial Standards for integration, harmonization and standardization of corporate secretarial practices. International Federation of Company Secretaries (IFCS), formed with the efforts of ICSI, decided to form an International Secretarial Standards Board which will formulate international secretarial standards to spread good corporate governance discipline across national borders
Companies follow diverse secretarial practices and, therefore, there is a need to integrate, harmonize and standardize such practices so as to promote uniformity and consistency.
Though adherence by companies to these Secretarial Standards shall be recommendatory in nature, with growing competition and ever rising need for good corporate governance practices, it is indeed a need of the hour to make these 'Standards' mandatory, to be followed in letter & spirit by companies, and we as Company Secretaries are the ones who are supposed to shoulder this responsibility for our organizations.
This article aims to provide you a sneak peek into the Secretarial Standards released till now by ICSI.
SS-1 Secretarial Standard on Meetings of the Board of Directors
The standard seeks to prescribe a set of principles for convening and conduct of Meetings of the Board of Directors and matters related thereto.
SS-2 Secretarial Standard on General Meetings The standard seeks to prescribe a set of principles for convening and conduct of General Meetings and matters related thereto.
SS-3 Secretarial Standard on Dividend The standard seeks to prescribe a set of principles in relation to declaration and payment of Dividend and matters incidental thereto or connected therewith.
SS-4 Secretarial Standard on Registers and Records Statutory Registers & Records form a vital part in the official documents of a company. A company is required to maintain certain registers and records. Some Registers & Records are not statutorily required to be maintained, some are required to be kept open for inspection by Directors, Members, etc. This Secretarial Standard seeks to prescribe a set of principles in relation to various registers and records including the maintenance and inspection thereof.
SS-5 Secretarial Standard on Minutes Minutes of meetings are vital record in itself; which describes what happened in a company and when. Being conclusive in nature, this record plays a very vital role in the company functioning and also as an evidence of happenings in a company. Therefore minutes must contain a fair & correct summary of the discussions & decisions taken at the meeting. This Secretarial Standard prescribes a set of principles for maintaining, recording, signing, dating, inspecting & preserving such minutes so as to ensure that the minutes record the true proceedings of the meetings and are accessible for future reference.
SS-6 Secretarial Standard on Transmission of Shares and Debentures Realizing the divergent practices involved in the transmission of shares and debentures and the difficulties faced by both the companies and the investors, this Secretarial Standard intends to lay down principles in relation to the documentation, verification of legal claimants in case of physically and electronically held shares as well as smooth functioning of the process. The Standard interalia deals with situations where shares are singly or jointly held, nominee has been appointed, shareholder has died intestate, etc.
SS-7 Secretarial Standards on Passing Resolutions By Circulation
Though decisions relating to the policy and operations of the company are arrived at meetings of the Board held periodically, it may not always be practicable to convene a meeting of the Board to discuss matters on which decisions are needed urgently. In such circumstances, passing of resolution by circulation can be resorted to.
This Secretarial Standard seeks to lay down a set of principles for passing of resolutions by circulation.
SS-8 Secretarial Standards on Affixing of Common Seal
Common seal of the company has a very critical importance in the functioning of the company. It is the signature of the company to any document on which it is affixed and binds the company for all obligations undertaken in the document. This Secretarial Standard seeks to lay down a set of principles for affixing the common seal of the company.
SS-9 Secretarial Standards on Forfeiture of Shares
On forfeiture of shares the member loses the amount paid thereon and his interest in the ownership of the shares. This Standard seeks to lay down a set of principles for forfeiture of both equity and preference shares arising from non-payment of calls.
In today's fiercely growing economy and the ever increasing need for good corporate governance in India Inc, it would not be surprising to see many more Secretarial Standards being introduced and all of them being made mandatory. This ultimately means that the scope & role of we Company Secretaries may, increase manifold.
About the Author
B.Com (Hons.), Company Secretary