The role of the company secretary, the individual that offers the answers to a multitude of questions coming from the board members, is vital in corporate governance. According to the corporation laws in all the states, the corporations must recruit company secretarial services. However, you will come across more information about the defining role of the company secretary in the best practices of governance in the corporations.
Things to know
The role of the company secretary services in India brings back the stereotype role providing assistance to the executive director or the chairman of the board. When you visualize the role of this service, you will come across the image of an individual running around to take the important notes. However, the changes in the trends of corporate governance have also altered the role of the corporate secretary.
Changes to note
The role of corporate secretarial services is gradually transforming from being in a mere supportive position and emerging as one of the most important positions in the corporation. When the laws hold the board of directors responsible for non-compliance, they, in turn, need a competent service provider who is familiar with the laws and ensures that the corporation complies with them all the time. Quite naturally, the most obvious place to seek information related to legal compliance is CS.
Knowledge of laws
A corporate secretarial firm must have knowledge and understanding of the laws and stay updated with them when they are amended. They must know when the law has been passed and how it is going to impact the current laws. Furthermore, they must stay prepared to communicate the requirements to the members of the board, shareholders, and the managers.
More qualified secretaries
The role of the top company secretary firms in India has now been redefined as the individual serving the corporations is now senior or equal to the managerial position. Apart from their usual duties, the services providers are known to offer advice to the chairman of the board, the executive director along with the rest. The board secretary signs on various legal documents and represents the corporation, and also bears accountability of the corporate seal. Moreover, the company secretary shares information with the board members and the managers about the best methodologies of corporate governance and work together to support them.
Due to the increased responsibilities of a company secretary in Delhi, the board of a corporation insists on a senior board member to fill this position. Often the corporations of today are finding it useful to appoint law practitioners to step into the shoes of a corporate secretary. A law degree allows the secretary to perform double duties for the corporation such as a general counsel on the one hand and play a legal role on the other. However, the minimum requirement for this post is to get a Master’s degree in commerce or business administration.
Duties of the corporate secretary
The corporate secretary needs to make sure that the business conducted by the organization and its affairs and operations comply with the bylaws. Not only do they need to have adequate knowledge of the existing laws, but they must communicate the amendments in the law and other information to the board of directors and the managers. Apart from this, they can play a significant role in the discussions with the executive director, the CEO, chairman of the board and the lawyers related to the legal issues. No wonder the corporations today hire lawyers to implement company and secretarial practice.
Summary of the role of corporate secretary
The corporate secretary has a definite role to play when it comes to the shareholders of a company. Ideally, they have to ensure that the shareholders get their dividends, deal with the matters regarding the allotment of shares, manage the transfer of shares, and issue the certificates of share. Moreover, they serve as the primary mode of communication with the shareholders based on the advice and the referral of the CEO, the chairman of the board, and the executive chair.
Given the versatility of the responsibilities of the corporate secretary, it is essential for the board to appoint a service provider with immense potential to meet the requirements of the role effectively. The secretary must stay updated with the occurrences in this field and have good communication skills.