ICSI - SECRETARIAL STANDARD

Secretarial Standards issued by The Institute of Company Secretaries of India: 

•  Meeting of the Board Of Directors (SS-1) 
• General Meeting (SS-2) 
• Dividend (SS-3) 
• Registers and Records (SS-4) 
• Minutes (SS-5) 
• Transmission of Shares and Debentures (SS-6) 
• Passing of Resolution by Circulation (SS-7) 
• Affixing of Common Seal (SS-8) 
• Forfeiture of Shares (SS-9) 
• Board’s  Report (SS-10)

  BRIEF ANALYSIS OF SECRETARIAL STANDARDS :

Meeting of the Board Of Directors (SS1) : 

The Board of Directors of a company holds a fiduciary position. The secretarial standards on meetings of the directors lays down a set of principles which companies are expected to adopt in the convening and conduct of meetings of the Board of Directors and Committees thereof. The standard seeks to enhance stakeholders confidence by focusing on the principles relating to responsibilities of the Chairman of the Board, preservation of minutes, disclosures of Annual Report etc. 

General Meeting (SS2) : 

The secretarial standard on General Meetings prescribes a set of principles which companies are expected to observe in the convening and conduct of General Meetings and matters related thereto. The members of a company exercise their decision making powers through the forum of General Meetings and hence it is essential that standards and best practices are followed by companies in this regard which will also strengthen shareholders confidence.

Dividend (SS3) :

 Declaration and distribution of dividend is a complicated task involving both financial and non-financial considerations. The secretarial standards lays down a set of principles in relation to the Declaration and payment of dividend. It also included interim dividend, treatment of unpaid dividend, revocation of dividend, dividend warrants etc. 

Registers and Records (SS4):

 A company is required to maintain certain registers and records. The standard prescribes a set of principles and good practices in relation to various registers and records including the maintenance and inspection thereof and gives a direction to the companies to establish and maintain systems that a comply with all statutory provisions and meet the needs of the stakeholders. The IT Act2000 permits the maintenance of registers and records in electronic mode. 

Minutes (SS5):  

Every company is required to keep minutes of all proceedings of the meetings conducted during its existence. Minutes kept in accordance with the provisions of the Act. The secretarial standards on minutes has dealt with Minutes of the meeting of:

• The Board or Committees of the Board
• Members
• Debentureholders
• Creditors
• Others as may be required under the Act

Transmission of Shares and Debentures (SS6) :  The Secretarial Standards Board (SSB) formulated the The secretarial standard on Transmission. This standard lays down principles in relation to the  documentation and for verification of legal claimants in case of physically and electronically held shares for the smooth functioning of the process.

SS6 has set standards in several areas to bring clarity and to unify the disparate practices, including

-         Documents required

-         Time period within which the transmission process should be completed

-         Preservation

 Passing of Resolution by Circulation (SS7): 

Decision relating to the policy and operations of  a company are arrived at meeting of the Board, held periodically. It may not always be practicable to convene a meeting of the Hoard to discuss matters on which decisions are needed urgently. In such circumstances passing of resolution by circulation can be resorted. Sec 289 of the Companies Act 1956 enables the Board of Directors to pass resolutions by circulation.  SS-7 authorize the Chairman of the Board or Managing Director and in their absence any other director to decide whether the approval of the Board for a particular  matter is to be obtained by means of resolution by circulation. 

Affixing of Common Seal (SS8):

 SS-8 deals with Affixing of common Seal. The  standard aims at clarifying documents which needed to be common sealed and procedure thereof. The unique feature of the standard is that it introduces the concept of Office seal.

Forfeiture of Shares (SS9) :

This  standard lays down a set of principles for forfeiture both for equity and preference shares arising from non-payment of calls. Forfeiture of shares is to be made only with the approval of the Board. The standard specifies the contents of notice which should be send to the defaulting member. The standard also clarifies about the pricing on re-issue of forfeited shares. 

Board’s  Report (SS10) :   

  The Board Report is the most important means of communication by the Board of Directors of a company with its stakeholders. This standard seeks to lay down certain additional disclosures  which are required to be made in Bard’s Report under various other enactments like disclosures pursuant to employee stock option and employee stock purchase schemes, pursuant direction of Reserve Bank Of India, various disclosures under listing agreement etc. This standard also seeks to cover the approval, signing, dating aspects for its preparation.

 CONCLUSION :

The ultimate goal of Secretarial Standards Board (SSB) to promote good corporate practice and leading to better corporate governance. The standards are fix good secretarial practices and desirable corporate governance with a view utmost transparency, integrity and for play, going beyond the minimum requirement of law.