Compliance is one of the most important parts of any company when we talk about corporate governance. A company secretary plays a very important role in respect of compliances. We always tend to think about Company Law compliances more, but these days, the company secretary acts as a compliance officer and looks after compliances of almost all Acts and even the secretarial audit, which is one of the prime areas of practice for company secretaries covers compliances of specifically applicable laws. So, what does it take to make a career as a Company Secretary?
CS Devendra V Deshpande a Fellow Member of the Institute of Company Secretaries of India (ICSI) and a Post Graduate in Commerce from Pune University, who was elected to the Central Council of the ICSI for the term 2019-2022 and served as Vice-President of The ICSI for the year 2021 before being elected as President, the ICSI, for the year 2022. In conversation with Dominic Rebello of the Free Press Journal, he reveals how the company secretary acts as a compliance officer and looks after the compliance of almost all the laws and what ICSI does to help advance skills in the area.
Incidentally, Deshpande with over 18 years of experience as a Practicing Company Secretary, specialises in the field of Corporate Laws, Foreign Exchange Laws, Audit under Company Law and other Allied Laws, Secretarial Audit and Corporate Restructuring.
Given below are edited excerpts of what he said...
There are many views about company laws that need to be changed. More important are provisions that lead to prosecution. What are your views?
The Companies Act 2013 has undergone a lot of changes since its inception. After the new Act came into being, there have been a lot of changes and all these changes were made with a view to improve the transparency and corporate governance in all the companies including small companies, private limited companies, unlisted or listed companies. The main aim of all these changes was for the betterment of corporate governance. In respect of prosecution, there is one e-pre-scrutiny system and e-adjudication system, which have been introduced and a centralized centre has been set up in Delhi. They are checking on a sample basis various forms, various documents filed by the professionals and they are inquiring into it. There have been prosecutions on various companies as well as few inquiries on professionals. There are few sections due to which some adjudicating authority is not able to charge lower fees, those need to be appealed to the appellate authority and they are giving the final orders in such cases. So such cases are happening and a robust system of prosecution and dealing with the show cause notices is already there in the Ministry of Corporate Affairs (MCA), as well as in the Institute of Company Secretaries of India when it comes to professionals and action against professionals by the government. The system at the Institute is also a well defined and transparent system when it comes to dealing with the Disciplinary cases filed with the Institute.
Corporate governance and compliances…
When we talk about corporate governance of a company, compliance is one of the most important parts and the company secretary plays a very important role in this aspect. The first thing that comes to mind when we think about compliances is Company Law. But nowadays, the company secretary has to look after compliances of almost all the Acts and even the secretarial audit, which is one of the prime areas of practice for company secretaries. It includes the checking of compliances of not only Company Law or SEBI related laws, but also specifically applicable laws and the systems for general laws. All these compliances are checked by company secretaries and he is the real compliance officer when it comes to compliance of any organization.
Is SEBI seen encroaching on Company Law?. Or is it redefining corporate democracy?. Your views.
SEBI is a specific different kind of regulator which looks after only listed companies. So whatever changes are made by SEBI, they are applicable to only those listed companies which are bound by SEBI. As a general principle of interpretation, whenever there are two laws, the stricter of the two prevails. So whenever SEBI comes out with a stricter provision than the Company Law, then all listed companies are required to follow that particular provision. Recently, SEBI came out with laws related to related party transactions in which there are a lot of representations given by corporate and there are a lot of questions which are coming from the corporates. Whether such actions by SEBI are encroaching, I think they have their own right to decide even though some relaxation may be given by SEBI in respect of that. Practical solutions can be given in that case.
How many students pass out every year and what is the absorption rate?
ICSI does have a placement cell as well as a placement portal on which all the members who become company secretaries enroll themselves for the job placement. There are two types of options which are available for members; one is employment, while the other is practice. Many of the students these days opt for practice and set up their own businesses or profession. But there are a few who go for employment. As of now there is no major issue with respect to employability. But at a higher level, there are no major job opportunities due to the overall conditions in the market. Every year around 98,000 to 1 lakh students get enrolled in the initial CSET examination and executive examination and every year around 4000 to 5000 members pass out. Currently, we are also looking for overseas placements of members as well as ICSI is looking for development of academic side of the profession whereas Members of the Institute can work as Professors in various UGC accreted Universities.
Practical and skill based training
ICSI already has a 24 months training structure for the students which is prescribed during the early stage. But now we have also started different courses for members. There are three types of courses which are very short term courses called crash courses. Then there are longer courses which are known as certificate courses and for the members we have Post Membership Qualification (PMQ) courses. These PMQ courses and certificate courses are playing a very important role when it comes to skill development. We even have tie ups with 16 IIMs throughout India and are going to organise a Leadership Development Programme on the 14th, 15th and 16th of April for company secretaries to develop their leadership skills. This programme will be held in Srinagar jointly with IIM Jammu.
Future plans of the Institute
ICSI is working on opening a dispute resolution and more importantly on Arbitration which is one of the core areas. We are also trying to find out what are the opportunities for company secretaries in cooperative laws. These are the two main areas in which the ICSI is working. This year we will revamp the entire syllabus of our curriculum and it will be in line with the New Education Policy (NEP). This revised syllabus will be implemented next year and hence this is a very important year for us.
