ICSI to come up with three more secretarial standards
May, 28th 2008
After the Institute of Chartered Accountants of India (ICAI) came up with AS 30, AS 31 and AS 32 accounting standards, the Institute of Company Secretaries of India (ICSI) has also decided to come up with three more secretarial standards that would be discussed in the council meeting on June 6 & 7 in Pune. Till date, ICSI has issued six secretarial standards.
Being pioneers in inculcating culture of good governance in corporate India, we have taken a major initiative in formulating and issuing secretarial standards, which are the first of its kind any where in the world, says NK Jain, secretary and CEO, ICSI.
The secretarial standards seek to integrate, harmonise and standardise the diverse secretarial practices prevalent in the corporate sector.
The secretarial standards aim at bringing more clarity and recommend good governance practices in areas where the law is silent. These do not overstep or modify the law in any way. The standards also interpret it correctly for stakeholders reference, emphasised Jain.
He further said the secretarial standards, if made mandatory, would be able to make transparency, accountability and good corporate governance.
According to the first standard, secretarial standard on meetings of the board of directors (SS-1) provides that Companies must convene their board meetings by giving notice to directors in this regard.
However, no minimum period for giving such notice has been laid down and, Companies are at liberty to give any or no length of notice for convening a board meeting. Further, there is no requirement for sending agenda for the meeting. While some Companies send the agenda in advance of the meeting, others place the agenda at the meeting itself.
The secretarial standard on board meetings prescribes a minimum period of 15 days for notice and seven days for agenda to be given before the date of the meetin. This ensures that board members have adequate time to study the papers and come fully prepared.
Companies having the objective of adopting sound governance principles are voluntarily adopting secretarial standards and are reporting their compliance in their annual reports viz Tata Metaliks, Kotak Mahindra Finance, Reliance Energy, HDFC, Ashok Leyland.