MCA Newsletter October 2023

The Ministry of Corporate Affairs (MCA) has released a Monthly Newsletter for the month of October 2023. The monthly newsletter features the work and activities carried out by the MCA from month to month.

Role of Company Secretary and Corporate Governance

“But times have changed. A Company Secretary is a much more important person nowadays than he was in 1887. He is no longer a mere clerk.”

~Lord Denning

According to the Organization for Economic Cooperation and Development (OECD), Corporate Governance (CG) involves a set of relationships between a company’s management, its board, its shareholders, and other stakeholders. In other words, CG is a system by which corporations are directed and controlled. Essential principles of CG include transparency, accountability, investor protection, better compliance with statutory laws and regulations, value creation for shareholders (and the other stakeholders) and societal value. More than five decades ago, on 4th October 1968, with the vision to be a global leader in development of professionals specialising in CG along with the mission to develop high calibre professionals facilitating good CG, the Institute of Company Secretaries of India (ICSI) came into existence as a Section 25 Company under the provisions of Companies Act, 1956.

ICSI was converted into a statutory body under the Company Secretaries Act, 1980 (CSA 1980) with effect from 1st January 1981 and has been entrusted with the responsibility of development and regulation of the profession of Company Secretary (CS). The Institute provides top-quality education to the students of CS Course and best quality set standards to CS Members. At present, there are more than 72,000 members and around 2.2 Lakhs students on the roll of ICSI. It has signed MOUs with 200 plus universities across the country, including 6 National Law Universities and 17 IIMs to impart knowledge and acuminate skills of students, academicians, and professionals. Moreover, it has set forth its foot in the international arena by setting up ICSI Overseas Centres in USA, UK, Dubai, Singapore, Australia and Canada which would augment professional opportunities for ICSI members and facilitate practical training for students.

The profession of CS, which commenced with the incorporation of the ICSI and subsequently the introduction of CSA 1980, aims to achieve excellence by adopting the aforementioned principles of CG and strives to comply with legal, ethical and regulatory requirements. At present, as per Section 2(24) of the Companies Act 2013 (CA 13), ‘company secretary’ or ‘secretary’ means a company secretary as defined in clause (c) of Section 2(1) of the CSA 1980, who is appointed by a company to perform the functions of a company secretary under the CA 13. It was the CA 13 which significantly redefined the roles and responsibilities of the CS by recognizing them as Key Managerial Personnel (KMP) under Section 2(51). As per Section 203 of the CA 13 read with Rule 8 and Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the appointment of CS as a KMP has been made mandatory for every listed company and every other public company or private company having a paid-up share capital of ten crore rupees or more because a CS is a compliance officer of the company who ensures that company complies with relevant legislation and regulations, and keeps board members informed of their legal responsibilities.

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