In the growing world of corporate entities, there is a need for professionals in every field and there is no doubt that the role of a company secretary is precise and important. The individual offering services in this field is responsible for the development of strategies, policies, and objectives of the company. Apart from this, the professional is indispensable for managing the organization efficiently in which the affairs are conducted by the board of directors, a council, or any other corporate structure. The corporate secretarial services have people working in the senior managerial position of the corporate structure to ensure effective administration within the company. They also certify the compliance of the corporation with the provisions of various statutes and acts.
With more duties and varied responsibilities than any other role within the scope of corporate governance, the company secretary is the most valued person. The board of directors know that they can rely on this individual to get the answers to their questions or get guidance from them to go to the right place for getting the replies. Corporate laws necessitate the appointment of company secretaries in relevant enterprises.
Snapshot of the changing role of company secretary
- They have diverse knowledge of all the functional and the legal aspects of an organization besides the secretarial.
- The role of the company secretary services in India is not restricted to a compliance officer, but the individual is now recognized as the key managerial person at par with the directors.
- To make an impact in the corporate sector, it is necessary to stay focused on several other areas such as corporate governance, arbitration and conciliation, human resource, sustainability reporting, taxation, and public relations.
Roles contributing to growth
The scope of the company secretary is going up every year and the functions in the corporate sector is diverse. In addition to the usual work responsibilities within the organizations, they are known to play their role in the following verticals.
- Corporate laws
- Mergers and acquisitions
- Corporate administration
- Corporate governance
- Direct and indirect taxes
- Board and shareholder meetings
- Stakeholder relationship
- Investor education and protection
- Managing stock exchanges, capital market and listing agreement
- Insider trading and representing the takeovers
Understanding the changing role
The moment you hear the words corporate secretary, the thing that comes to your mind is of an individual assisting the executive director or the board chair. With this stereotyped picture, you can imagine someone running around to do things such as taking important notes, following up for several things for others, and setting the board meetings. The changes in the rules of governing the corporate entities do not restrict the role of the company secretary and bestows several other responsibilities on the individual.
Today, the role of the company secretary is transforming from a mere support person to someone in the key positions of governance within the corporation. The board of directors need people in the role who is familiar with the laws that ensure that the corporation stays compliant all the time and the most logical person to handle is someone from the corporate secretarial firm to deliver their needs. Those who step into this role must also be familiar with the Securities and Exchange Act of 1934 and stay on track with the quarterly and the annual financial reports along with the interim reports about the events that impact the investors. The Act also holds stipulations for the voting protocols and the meetings and the company secretary needs to make sure whether the board follows them accurately. They must also study and understand the laws in depth when they are superseded or amended.
Incorporation of the company
A declaration is to be given by the corporate secretary for the incorporation of the company and the individual is engaged in the formation of a company and confirm whether it complies with all the rules and acts. Similarly, for the annual report, the individual has to sign and certify the correctness of the annual return.
Secretarial audit
A company has to organize the performance of the secretarial audit performed by the corporate secretarial services and the board of directors must explain the observations and the remarks made by the secretary in the report.
Opportunities of growth in the corporate world
The following opportunities can help in the growth of professional corporate secretarial practices.
- Heavy demand factors and the growth of the corporate sector in India.
- Entry of the professionals into various departments such as taxation, risk management, HR, and finance.
- Enhanced scope of professional services in international laws.
- Increased opportunities in valuation, competition, and the insolvency laws. Many of them are working in the top law firms in India, and are hired in the corporate sector.
Summing it up
The role of the corporate secretary is a senior position almost equal to the managerial position. Apart from the normal duties, they are also known to offer advice and counsel the executive director, the board chair and the other people in the senior positions. Besides this, they need to ensure that the organization conducts effective business and governs its affairs according to the laws. While they must comprehend the existing and the new laws, they must also communicate the information to the managers and the board of directors. Due to the expanded responsibilities of the corporate secretaries, it is essential for the boards to appoint someone who is competent enough to meet the evolving roles. People with accounting and legal background and those who can stay on track with the current happenings are considered able enough to handle this role effectively.