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Introducing Secretarial Standards, its objectives, formation process etc. on 23rd June 2011, 10:42 am
Club Exe
CSoC Super Master
INTRODUCTION
The Institute of Company Secretaries of India (ICSI) has long back introduced some set of rules and norms, which are supplementary to the Companies Act, 1956, called as ‘Secretarial Standards’ and popularly termed as ‘SS’.
ICSI has been the first professional body in the world to start the process of setting Secretarial Standards for integration, harmonization and standardization of corporate secretarial practices. International Federation of Company Secretaries (IFCS), formed with the efforts of ICSI, decided to form an International Secretarial Standards Board which will formulate international secretarial standards to spread good corporate governance discipline across national borders.
Secretarial Standards Board and its Objectives
The Institute of Company Secretaries of India, (ICSI), recognising the need for integration, harmonisation and standardisation of diverse secretarial practices, has constituted the Secretarial Standards Board (SSB) with the objective of formulating Secretarial Standards.
The scope of SSB is to identify the areas in which Secretarial Standards need to be issued by the Council of ICSI and to formulate such Standards, taking into consideration the applicable laws, business environment and best secretarial practices. SSB will also clarify issues arising out of such Standards and issue guidance notes for the benefit of members of ICSI, corporates and other users.
The main functions of SSB are:
(i) Formulating Secretarial Standards;
(ii) Clarifying issues arising out of the Secretarial Standards;
(iii) Issuing Guidance Notes; and
(iv) Reviewing and updating the Secretarial Standards / Guidance Notes at periodic intervals.
Need for Secretarial Standards
Companies follow diverse secretarial practices and, therefore, there is a need to integrate, harmonise and standardise such practices so as to promote uniformity and consistency.
Scope of Secretarial Standards
The Secretarial Standards do not seek to substitute or supplant any existing laws or the rules and regulations framed there under but, in fact, seek to supplement such laws, rules and regulations.
Secretarial Standards that are issued will be in conformity with the provisions of the applicable laws. However, if, due to subsequent changes in the law, a particular Standard or any part thereof becomes inconsistent with such law, the provisions of the said law shall prevail.
ICSI will endeavour to persuade the Government and appropriate authorities to enforce these Standards, to facilitate the adoption thereof by industry and corporate entities in order to achieve the desired objective of standardisation of secretarial practices.
Procedure for issuing Secretarial Standards
The following procedure shall be adopted for formulating and issuing Secretarial Standards:
1. SSB, in consultation with the Council, shall determine the areas in which Secretarial Standards need to be formulated and the priority in regard to the selection thereof.
2. In the preparation of Secretarial Standards, SSB may constitute Working Groups to formulate preliminary drafts of the proposed Standards.
3. The preliminary draft of the Secretarial Standard prepared by the Working Group shall be circulated amongst the members of SSB for discussion and shall be modified appropriately, if so required.
4. The preliminary draft will then be circulated to the members of the Central Council as well as to Chairmen of Regional Councils/ Chapters of ICSI, various professional bodies, Chambers of Commerce, regulatory authorities such as the Department of Company Affairs, the Department of Economic Affairs, the Securities and Exchange Board of India, Reserve Bank of India, Department of Public Enterprises and to such other bodies / organisations as may be decided by SSB, for ascertaining their views, specifying a time-frame within which such views, comments and suggestions are to be received. A meeting of SSB with the representatives of such bodies / organisations may then be held, if considered necessary, to examine and deliberate on their suggestions.
5. On the basis of the preliminary draft and the discussion with the bodies / organisations referred to in 4 above, an Exposure Draft will be prepared and published in the “Chartered Secretary”, the journal of ICSI, and also put on the Website of ICSI to elicit comments from members and the public at large.
6. The draft of the proposed Secretarial Standard will generally include the following basic points:
(a) Concepts and fundamental principles relating to the subject of the Standard;
(b) Definitions and explanations of terms used in the Standard;
(c) Objectives of issuing the Standard;
(d) Disclosure requirements; and
(e) Date from which the Standard will be effective.
7. After taking into consideration the comments received, the draft of the proposed Secretarial Standard will be finalised by SSB and submitted to the Council of ICSI.
8. The Council will consider the final draft of the proposed Secretarial Standard and finalise the same in consultation with SSB. The Secretarial Standard on the relevant subject will then be issued under the authority of the Council.
Compliance with Secretarial Standards
In the initial years, the Secretarial Standards will be recommendatory. The Institute will request the Government and other appropriate authorities to enforce these Standards and will endeavour to educate the users about the utility and need for compliance with these Standards. The Standards would be made mandatory thereafter.
The Institute has so far issued Ten Secretarial Standards as under:
• SS-1 Secretarial Standard on Meeting of the Board of Directors
• SS-2 Secretarial Standard on General Meetings
• SS-3 Secretarial Standard on Dividend
• SS-4 Secretarial Standard on Registers and Records
• SS-5 Secretarial Standard on Minutes
• SS-6 Secretarial Standard on Transmission of Shares and Debentures
• SS-7 Secretarial Standard on Passing of Resolutions by Circulation
• SS-8 Secretarial Standard on Affixing of Common Seal
• SS-9 Secretarial Standard on Forfeiture of Shares
• SS-10 Secretarial Standard on Board's Report.
Compiled & Contributed by CS Professional Student Kumari Sindhu C
The Institute of Company Secretaries of India (ICSI) has long back introduced some set of rules and norms, which are supplementary to the Companies Act, 1956, called as ‘Secretarial Standards’ and popularly termed as ‘SS’.
ICSI has been the first professional body in the world to start the process of setting Secretarial Standards for integration, harmonization and standardization of corporate secretarial practices. International Federation of Company Secretaries (IFCS), formed with the efforts of ICSI, decided to form an International Secretarial Standards Board which will formulate international secretarial standards to spread good corporate governance discipline across national borders.
Secretarial Standards Board and its Objectives
The Institute of Company Secretaries of India, (ICSI), recognising the need for integration, harmonisation and standardisation of diverse secretarial practices, has constituted the Secretarial Standards Board (SSB) with the objective of formulating Secretarial Standards.
The scope of SSB is to identify the areas in which Secretarial Standards need to be issued by the Council of ICSI and to formulate such Standards, taking into consideration the applicable laws, business environment and best secretarial practices. SSB will also clarify issues arising out of such Standards and issue guidance notes for the benefit of members of ICSI, corporates and other users.
The main functions of SSB are:
(i) Formulating Secretarial Standards;
(ii) Clarifying issues arising out of the Secretarial Standards;
(iii) Issuing Guidance Notes; and
(iv) Reviewing and updating the Secretarial Standards / Guidance Notes at periodic intervals.
Need for Secretarial Standards
Companies follow diverse secretarial practices and, therefore, there is a need to integrate, harmonise and standardise such practices so as to promote uniformity and consistency.
Scope of Secretarial Standards
The Secretarial Standards do not seek to substitute or supplant any existing laws or the rules and regulations framed there under but, in fact, seek to supplement such laws, rules and regulations.
Secretarial Standards that are issued will be in conformity with the provisions of the applicable laws. However, if, due to subsequent changes in the law, a particular Standard or any part thereof becomes inconsistent with such law, the provisions of the said law shall prevail.
ICSI will endeavour to persuade the Government and appropriate authorities to enforce these Standards, to facilitate the adoption thereof by industry and corporate entities in order to achieve the desired objective of standardisation of secretarial practices.
Procedure for issuing Secretarial Standards
The following procedure shall be adopted for formulating and issuing Secretarial Standards:
1. SSB, in consultation with the Council, shall determine the areas in which Secretarial Standards need to be formulated and the priority in regard to the selection thereof.
2. In the preparation of Secretarial Standards, SSB may constitute Working Groups to formulate preliminary drafts of the proposed Standards.
3. The preliminary draft of the Secretarial Standard prepared by the Working Group shall be circulated amongst the members of SSB for discussion and shall be modified appropriately, if so required.
4. The preliminary draft will then be circulated to the members of the Central Council as well as to Chairmen of Regional Councils/ Chapters of ICSI, various professional bodies, Chambers of Commerce, regulatory authorities such as the Department of Company Affairs, the Department of Economic Affairs, the Securities and Exchange Board of India, Reserve Bank of India, Department of Public Enterprises and to such other bodies / organisations as may be decided by SSB, for ascertaining their views, specifying a time-frame within which such views, comments and suggestions are to be received. A meeting of SSB with the representatives of such bodies / organisations may then be held, if considered necessary, to examine and deliberate on their suggestions.
5. On the basis of the preliminary draft and the discussion with the bodies / organisations referred to in 4 above, an Exposure Draft will be prepared and published in the “Chartered Secretary”, the journal of ICSI, and also put on the Website of ICSI to elicit comments from members and the public at large.
6. The draft of the proposed Secretarial Standard will generally include the following basic points:
(a) Concepts and fundamental principles relating to the subject of the Standard;
(b) Definitions and explanations of terms used in the Standard;
(c) Objectives of issuing the Standard;
(d) Disclosure requirements; and
(e) Date from which the Standard will be effective.
7. After taking into consideration the comments received, the draft of the proposed Secretarial Standard will be finalised by SSB and submitted to the Council of ICSI.
8. The Council will consider the final draft of the proposed Secretarial Standard and finalise the same in consultation with SSB. The Secretarial Standard on the relevant subject will then be issued under the authority of the Council.
Compliance with Secretarial Standards
In the initial years, the Secretarial Standards will be recommendatory. The Institute will request the Government and other appropriate authorities to enforce these Standards and will endeavour to educate the users about the utility and need for compliance with these Standards. The Standards would be made mandatory thereafter.
The Institute has so far issued Ten Secretarial Standards as under:
• SS-1 Secretarial Standard on Meeting of the Board of Directors
• SS-2 Secretarial Standard on General Meetings
• SS-3 Secretarial Standard on Dividend
• SS-4 Secretarial Standard on Registers and Records
• SS-5 Secretarial Standard on Minutes
• SS-6 Secretarial Standard on Transmission of Shares and Debentures
• SS-7 Secretarial Standard on Passing of Resolutions by Circulation
• SS-8 Secretarial Standard on Affixing of Common Seal
• SS-9 Secretarial Standard on Forfeiture of Shares
• SS-10 Secretarial Standard on Board's Report.
Compiled & Contributed by CS Professional Student Kumari Sindhu C
