INDUSTRY RATHER THAN STATUTE TO DRIVE FUTURE GROWTH

The Institute of Company Secretaries of India (ICSI) is part of a triumvirate of professional bodies that were set up expressly to generate and regulate an army of professionals which could guide, control and regulate the growth path of corporate India. The current President, Ranjeet Kumar Pandey, has an extended career in the field of corporate and commercial law, and also an investment banking exposure. He talks about the aegis, the relevance and the future path of the institute in a chat with Pankaj Joshi.

Edited excerpts: How do you profile the Institute currently?

The Institute of Company Secretaries of India has been established through an Act of Parliament. It is a statutory body with specific responsibilities. The appointment of a Company Secretary by corporates is also a requirement of statute. Beyond the New Delhi headquarters and four regional offices, we have 70 chapters across the country through which students ask and receive guidance of different kinds.

The registered student strength of the institute is around four lakh. In terms of graduates, our strength is around 57,000. However, the active strength would be slightly less, at around 52,000. The North and West regions make up strong portions of our active membership. In the North, our approximate active member count would be 18,000 and in the West around 17,000. The South region contributes around 11,000 and the East has 6,000.

Now let us look at the membership profile. Activity wise, there are two types of company secretaries— those who are in professional practice and those who are employed. We believe the number of those in practice would be in the range of 12,000 and those in corporate employment would be 40,000.

As of now, our annual pass-out quantum would be around 5,000. In the last eight years there has been a lot of growth, the membership has practically doubled from 2010 levels.

How would you look at the responsibility and relevance of a Company Secretary?

Once again let us visit the premise under which the Institute was created by Parliament. The government needed professionals across different streams of corporate activity. Therefore you had three institutes and three professional disciplines created with each having separate responsibilities. The specific responsibility of the company secretary was to look at the areas of corporate governance, compliance with the Registrar of Companies (RoC) filing and other needs, and the risk management structure. Hence, the course was defined accordingly.

If you talk of accountability, there are multiple layers in our discipline structure. There is a code of conduct in place, beyond which is a disciplinary mechanism, and above that is a disciplinary council which has representation from the government as well. There are multiple checks and balances on member conduct. Thankfully, our professionals have not been involved in any kind of financial scams. In fact you marry collect that in the 2008 Satyam case, it was actually a company secretary that was the whistle blower and at that time our role in general was much appreciated by the authorities.

How do you view the company secretary's responsibility in the context of multiple Government operations targeting shell company scams?

This is a somewhat complex matter. Firstly, under the law, what constitutes a shell company needs to be defined much more clearly. If you look at the matter in practical terms, a shell company is one where the financial transactions do not have real-world activity backup. Whereas according to legal interpretation, any company with zero activity is also treated as a shell company.

The recent years have seen aggressive action to identify and pursue shell companies. We have seen around 2.5 lakh companies struck off the register. Now, within those, there were something like 16,000 companies which qualified as big and which would have to engage the services of some company secretary. The remainder were small, and therefore exempted from the need to engage a company secretary.

Another aspect of the matter is that the reason for finding and weeding out shell companies was financial in nature. Now the role of a company secretary in monitoring the nature and route of financial transactions is minimal.

How do you see your relevance in future and capacity to attract student applicants?

There is no question there. We now desire to be more relevant in the bigger scheme of things. We are internally identifying roles for that effect. We are also delving into industry wise and segment wise possibilities, like in banking or insurance or equities. We are trying to explore opportunities that can be available for a company secretary. It is clear that the company secretary has the calibre to go much beyond just compliances in terms of work profile. We are in touch with various industry level bodies.

Now in all this, we are clear that the profile growth, and development of that into demand, has to be market driven. We are honestly saying that it should not be statute driven. The demand has to come from industry and corporates, and there has to be clarity about the competency requirements. That is what will decide the supply quantity from the side of the institute. There is absolutely no looking to targets or quantum. We are totally looking at the quality of new qualifications, of new members and how they will be relevant to the corporate world and to the nation at large.