Guid­ing cor­po­rates to achieve good governance

CRUNCH­ING NUM­BERS A com­pany sec­re­tary ad­vises a com­pany’s board on strat­egy for­mu­la­tion, com­pli­ances be­sides act­ing as a link be­tween the board and var­i­ous stake­hold­ers

Hindustan Times (Delhi) - HT Education - - Front Page - Rozelle Laha

Atul H Me­hta was not keen on tak­ing up math­e­mat­ics and sta­tis­tics dur­ing his higher stud­ies and took up a course in com­pany sec­re­tary­ship in­stead af­ter a friend ad­vised him to do so. To­day, he does not re­gret his de­ci­sion and has achieved great suc­cess by be­com­ing the pres­i­dent of In­sti­tute of Com­pany Sec­re­taries of In­dia.

Over the years, his work has in­volved pre­par­ing project re­ports, iden­ti­fy­ing the po­ten­tial mar­ket and clien­tele, get­ting re­ports vet­ted by banks or pub­lic fi­nance in­sti­tu­tions, ap­ply­ing for loans from fi­nan­cial in­sti­tu­tions be­fore dis­burs­ing that money to the share­hold­ers of the com­pany in­volved.

“Com­pany sec­re­taries act like in-house lawyers, tak­ing care of day-to-day func­tions/ ac­tiv­i­ties of cor­po­rate sec­re­tar­ial de­part­ment in an or­gan­i­sa­tion,” says Me­hta.

They are pro­fes­sion­als who take care of governance-re­lated is­sues in a com­pany and also sign doc­u­ments that are sent to reg­u­la­tors, in­clud­ing the min­istry of cor­po­rate af­fairs, stock ex­changes and Se­cu­ri­ties and Ex­change Board of In­dia (SEBI).

They are also re­spon­si­ble for con­duct­ing board meet­ings, pre­par­ing the agenda, is­su­ing notices to the board of di­rec­tors, fol­low­ing up or­ders for these meet­ings, and han­dling le­gal com­pli­ances of an or­gan­i­sa­tion.

The j ob i nvolves giv­ing ad­vice on con­duct­ing a busi­ness, deal­ing with sit­u­a­tions in­volv­ing con­flict of in­ter­est, sug­gest­ing ways to pre­pare fi­nan­cial re­ports, and de­vel­op­ing cor­po­rate strat­egy and as­sit­ing in plan­ning.

Be­sides com­pany law, there are sev­eral other laws ap­pli­ca­ble to or­gan­i­sa­tions do­ing busi­ness. Com­pa­nies with more than 20 em­ploy­ees are gov­erned by a range of labour laws that in­clude Min­i­mum Wages Act, Bonus Act, Gra­tu­ity Act, Fac­tory Act, For­eign Ex­change Reg­u­la­tion Act etc. Com­pany sec­re­taries are re­quired to deal with these as well.

Sev­eral SEBI reg­u­la­tions ap­ply to a listed com­pany. The reg­u­la­tor ex­pects com­pa­nies to get their quar­terly re­sults pub­lished in the me­dia and en­sure that they com­ply with these reg­u­la­tions. Most of these func­tions are taken care of by a com­pany sec­re­tary em­ployed with the firm, says Me­hta.

Com­pany sec­re­taries are much sought af­ter. To­day, there is de­mand of ap­prox­i­mately 7,000 com­pany sec­re­taries in In­dia, he adds. Ev­ery listed com­pany is re­quired to have on its rolls a full-time CS as per Com­pa­nies Act 2013. In In­dia, there are about 10 lakh com­pa­nies, out of which a lakh are pri­vate lim­ited ones, of which 7,000 are listed in the stock mar­ket. About 1,000 of these 7,000 firms are large and are re­quired to em­ploy sev­eral these pro­fes­sion­als.

When it comes to study­ing for be­com­ing a com­pany sec­re­tary, stu­dents must re­mem­ber that about 90% of the CS syl­labus con­sists of cor­po­rate law. Most of these laws also form part of the LLB course. A LLB qual­i­fi­ca­tion along with the CS course is an added ad­van­tage. Some of the skills that one re­quires to be­come a CS in­clude an an­a­lyt­i­cal mind, in­ter­est in case stud­ies and laws of the coun­try.

Atul H Me­hta, pres­i­dent, The In­sti­tute of Com­pany Sec­re­taries of In­dia, pur­sued a ca­reer in law along­side his com­pany sec­re­tary course, which, he thinks, gave him an edge over oth­ers in the in­dus­try.

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