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ICSI for making secretarial standards mandatory

Richa Mishra

Better compliance
If the secretarial standards devised by ICSI were made mandatory, it would improve the compliance of corporate governance norms by India Inc.

New Delhi , March 24

With the work on revamping the Company Law in progress, the Institute of Company Secretaries of India (ICSI) has stepped up its demand for making secretarial standards (SS) issued by it mandatory under the law.

Mr H.M. Choraria, President, ICSI, said that the Institute desires that the SS be treated on the lines of accounting standards (AS) issued by the Institute of Chartered Accountants of India (ICAI).

The standards are at present recommendatory.

The Institute has already put forward this view to the Ministry of Company Affairs and plans to take it up with the capital market regulator, Securities and Exchange Board of India (SEBI).

Speaking to Business Line, he said that if such standards were made mandatory, it would improve the compliance of corporate governance norms by India Inc.

Corporate majors

Corporate houses such as Reliance Industries Ltd, Tata Metaliks Ltd, Reliance Energy Ltd, and Ashok Leyland Ltd are adopting some of these standards.

In fact, the Institute is open to the idea of a national advisory committee on accounting standards (NACAS) to examine the standards issued by the ICSI, he said.

During 2000-01, the ICSI had decided to set up a Secretarial Standards Board (SSB) to integrate, harmonise and standardise various secretarial practices prevalent in the corporate sector.

The SSB comprises representatives of the Company Affairs Ministry, SEBI, ICAI, and Institute of Cost and Works Accountants of India, besides eminent members of the profession of Company Secretaries.

Four standards

The Institute has so far issued four standards — Secretarial Standards on Meetings of Board of Directors (SS-1), Secretarial Standards on General Meetings (SS-2), Secretarial Standards on Dividend (SS-3), and Secretarial Standards on Registers and Records (SS-4).

The Secretarial standards on managerial remuneration, loans and investments, directors, related party transactions, and investor servicing, are under consideration of the SSB.

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