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Strategic Options For Practice Of Company Secretaries In The New Decade

The only constant is change. It is imperative that with the advent of technology and the spectrum of developing businesses, the avenues for the Company Secretaries is expanding. The syllabus of Institute of Company Secretaries of India ("ICSI") covers wide range of subjects and the training imparted throughout the course makes the professionals proficient to expand their areas of practice.

Since its inception in October 1968, ICSI has been in the endeavor to create better prospects which is evident from ICSI's:
  • Vision:
    To be global leader in development of professionals specializing in Corporate Governance.
  • Mission:
    To continuously develop high caliber professionals ensuring good corporate governance and effective management and to carry out proactive research and development activities for protection of interest of all stake holders, thus contributing to public good.
Due to the efforts of ICSI, under the Companies Act, 2013, CS have been recognized as Key Managerial Personnel. Further ICSI has undergone changes and has adapted to the latest technologies such as its collaboration with TCS for online training programs through TCS iON, with various universities in India and abroad to ensure that its members and students have several opportunities - to pursue higher studies as well as to build a robust career.

Most commonly, Company Secretaries ("CS") start their own practice or work as employees in an organization wherein the scope of work is determined on the nature of the organization - listed, public, or private entities.

CS are already practicing as Compliance Officers under various SEBI regulations and guidelines. Further, CS appear before various tribunals such as Securities Appellate Tribunal, Competition Commission of India, National Company Law Tribunal and National Company Law Appellate Tribunal.

However, now that the model of businesses is changing and the main goal is to focus on expanding, the policies of the Government are aligned with this vision of ease of doing business, leading to promotion of small businesses and start-ups in India. It is essential that CS grows its role accordingly as per the professional needs in the market.

Valuation denotes the value of the underlying assets as on a particular date. Business or asset valuation is critical for strategic business decisions including fund raising, M&A, sale of business, liquidation, strategic business decisions like family or shareholders' disputes and voluntary value assessment. At times, valuation is also required under various statutes and compliance is required for certain regulatory or accounting requirements in India under RBI, Income Tax, Companies Act, SEBI Laws, etc.

Better corporate governance is also leading to the requirement of independent business valuations to promote transparency. Certain companies like Infosys have reported 'Valuation of Human Resources' as part of their voluntary disclosures for many years.

Valuation is an evolving field however it is an inexact science. Professional judgement of the valuer is thus critical in any valuation exercise. Due to lack of Indian Valuation Standards and absence of any Regulatory Authority to control, guide and develop the practice of valuation in India, different valuers were taking different assumptions leading to drastic differences in value conclusion. In many cases, the valuation also lacked uniformity.

Thus, the Ministry of Corporate Affairs notified the provisions governing valuation by registered valuers under Section 247 of the Companies Act, 2013 read with Companies (Registered Valuers and Valuation) Rules, 2017 which came into effect from October 18, 2017. Insolvency and Bankruptcy Board of India is the regulatory authority for valuation.

CS in whole time practice can apply for being a Registered Valuer. However, five years of continuous post membership experience is mandatory.

This has tremendous scope as mandatory valuation by a Registered Valuer is required under the following provisions of the Companies Act, 2013:
  • Section 62(1)C: Valuation report for Further Issue of Shares
  • Section 192(2): Valuation of Assets Involved in Arrangement of Non-cash transactions involving Directors
  • Section 230(2)(c)(v): Valuation of shares, property and assets of the Company under a scheme of Corporate Debt Restructuring
  • Section 230(3) Valuation report along with Notice of creditors/ shareholders meeting -Under scheme of compromise/ Arrangement
  • Section 232(2)(d): The report of the expert with regard to valuation, if any, would be circulated for meeting of creditors/ Members
  • Section 232(3)(h): The Valuation report to be made by the tribunal for exit opportunity to the shareholders of transferor Company -Under the scheme of Compromise/ Arrangement in case the Transferor company is Listed Company and the Transferee- company is an unlisted Company
  • Section 236(2): Valuation of equity shares held by the Minority Share Holders
  • Section 281(1) Valuing assets for submission of report by liquidator
  • Thus, Practicing CS have tremendous scope to step into this field for which the rules have been crystalized recently.


Initially, a lot of businesses depended on oral agreements, however now, with more specificities and nature of contracts, the trend has moved towards well drafted written agreements. Despite this, there are several issues which may arise under the contract which require a speedy resolution. Often negotiations between parties fail. Businesses work on the basis of cost-benefit analysis and due to lengthy processes and time-consuming nature of litigations (4.7 crore matters are pending in India[1]), most businesses have started relying upon alternate dispute resolution mechanisms, such as arbitration.

In India, arbitration is governed by the Arbitration and Conciliation Act, 1996. Under arbitration, a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. Further, arbitration is consensual in nature, i.e., arbitration can only take place if both parties have agreed to it.

Further, the parties mutually select the arbitrator, the language in which the proceedings of the arbitration shall be conducted, the procedure under which the arbitration is to be carried out - for instance, ICC, MICA, SIAC, LCIA, the venue/place of arbitration, i.e., the place where the arbitration will take place and the seat of the arbitration, i.e., the laws that are applicable. This gives the parties a lot of freedom to determine how the issue is to be resolved in a speedy manner.

In the recent years, arbitration has gained a lot of popularity. Thus, it is a dual opportunity for the CS - either to represent the Company in the arbitration or become an Arbitrator and pass an arbitral award. The scope of arbitration is very wide, and CS can tap this opportunity by entering into this field. What is imperative to become a good arbitrator besides knowledge of law and having commendable written skills, is being neutral and having high integrity. As arbitration does not limit the practice of a professional to her own countries' jurisdiction, CS have the opportunity to work on this on an international level.

Forensic Audit

Forensic audit is a detailed engagement which requires the expertise of not only accounting and auditing procedures but also expert knowledge regarding the legal framework, and a forensic auditor is required to have an understanding of various frauds that can be carried out and of how evidence needs to be collected.

Right from initiating the amendments in the Prevention of Money-laundering Act, 2002 (PMLA) through Finance Act, 2018 to enhancing the scope of preventing and punishing the frauds with the assistance of Serious Fraud Investigation Office ("SFIO"), Government is working at length and breadth to enhance governance in the corporates and to ensure corporate compliances at par.

SFIO is a multi-disciplinary organization under Ministry of Corporate Affairs, consisting of experts in the field of accountancy, forensic auditing, law, information technology, investigation, company law, capital market and taxation for detecting and prosecuting or recommending for prosecution white-collar crimes/frauds.

In the selection of timely detection, prevention and regulation over corporate fraud and reference to due investigation, Forensic Audit has a domineering role in assisting the corporates for maintaining efficiency and merit. On the larger parameters, Forensic Audit as tool-mix of accounting and investigation is serving all the five E's of good governance and make the corporates to grow and develop on the parameters of being Effective, Efficient, Easy, Empower, and Equity. In this background, where forensic audit is considered as a need of the hour for enhancing the corporate culture of India.

To promote the CS into the field of Forensic Audit, ICSI has also introduced this as an optional subject in CS Professional course under the 2017 syllabus.

It should be comprehended that corporate compliance lies not in the adequacy of legislature, but in its implementation. Here comes the effective role of CS to implement the enactments of various laws enough to eradicate fraud completely. Implementation of the law should be given more importance, to reduce the occurrence of fraud. Indeed, a directed implementation of the provisions promoting the parameters of the governance is similar to what is blood for the veins.

Under this context, one must not forget that in the last five decades, ICSI along with its expert professional commune has immensely contributed in turning each and every stone right from conducting forensic audit to examining the evidences, from finding the culprit behind the fraud to appearing in the court for submitted the testimony, CS are apt in serving their professional excellence as a forensic auditor.

Intellectual Property Rights

Intellectual Property (IP) deals with any basic construction of human intelligence such as artistic, literary, technical or scientific constructions. Intellectual Property Rights (IPR) refers to the legal rights granted to the inventor or manufacturer to protect their invention or manufacture product. These legal rights confer an exclusive right on the inventor/manufacturer or its operator who makes full use of it's his invention/product for a limited period of time.

In other words, the legal rights prohibit all others from using the IP for commercial purposes without the prior consent of the IP rights holder. It is very well settled that IP plays an important role in the modern economy.

IP rights (IPR) include patents, copyright, industrial design rights, trademarks, plant variety rights, trade dress, geographical indications, and in some jurisdictions trade secrets. The World Trade Organization has prepared an Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") which came into effect on January 1, 1995. Most of the countries are a party to TRIPS.

The laws governing IPR in India are as follows:
  • Trademarks Act, 1999
  • The Patents Act, 1970 (amended in 2005)
  • The Copyright Act, 1957
  • The Designs Act, 2000
  • The Geographical Indication of Goods (Registration and Protection) Act, 1999
  • The Protection of Plant Varieties and Farmers Rights Act, 2001
  • The Information Technology Act, 2000
Amongst all industries, it has been observed that the pharmaceutical companies are aggressively moving towards patenting. Further, India being the place for Bollywood, Tollywood and several local cinemas, specialization in copyright plays an important role.

To promote the CS into the field of IPR, ICSI has introduced this as an optional subject in CS Professional course under the 2012 and 2017 syllabus.

As one can get their rights secured in several jurisdictions, the role of the CS is not limited to the jurisdiction of India but also abroad. Being a field picking up traction in India, it is a good opportunity for CS to specialize in it.

Prevention of Sexual Harassment at Workplace
Vishaka & Others v. State of Rajasthan (AIR 1997 SC 3011) is a landmark judgment of the Hon'ble Supreme Court of India in 1997, wherein various women's groups filed Public Interest Litigation ("PIL") against the State of Rajasthan and the Central Government of India to enforce the fundamental rights of working women under Articles 14, 19 and 21 of the Constitution of India. The PIL was filed after Ms. Bhanwari Devi, a social worker in Rajasthan, was brutally gang raped for stopping a child marriage.

In 1997, there was no law pertaining to sexual harassment at workplace, the Hon'ble Supreme Copurt relied upon International Conventions and norms which played a significant role in the interpretation of gender equality, right to work with human dignity under Articles 14, 15, 19(1)(g) and 21 of the Constitution and stated that the safeguards against sexual harassment are implicit under the aforementioned Articles. The Supreme Court laid down the guidelines which are often referred to as the "Vishakha Guidelines".

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act was passed in 2013 which is effective from April 23, 2013 ("POSH Act"), superseded the Vishakha Guidelines.

Disclosure Requirements by Companies
  • Under POSH Act
    Section 21: Committee to submit annual report:
    1. The Internal Committee or the Local Committee, as the case may be, shall in each calendar year prepare, in such form and at such time as may be prescribed, an annual report and submit the same to the employer and the District Officer.
    2. The District Officer shall forward a brief report on the annual reports received under sub-section (1) to the State Government.
  • Section 22: Employer to include information in annual report Advertisement The employer shall include in its report the number of cases filed, if any, and their disposal under this Act in the annual report of his organisation or where no such report is required to be prepared, intimate such number of cases, if any, to the District Officer.

Under Companies Act, 2013 and LODR 2015
Listed Companies:
The reporting of sexual harassment cases received, disposed of and pending during the financial year is done on an annual basis only: All listed companies provide for the details in the Corporate Governance Report which forms part of the Annual Report. It is a mandatory requirement under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) under Section (C) of Schedule V - item 10(i).

Additionally, top 1000 listed companies are required to report the number of cases filed by the employees during the year and number of cases pending at the end of the financial year in the Business Responsibility and Sustainability Report prescribed under Regulation 34 of LODR.

Further, data of the previous financial year is also required to be reported in the same format. This forms part of Principle 5 - PRINCIPLE 5 'Businesses should respect and promote human rights'. Please note that the stock exchanges rely on the data provided by the listed companies in their Annual Report.

Other Than Listed Companies:
Separately, please note that all other companies (other than listed companies) are also required to provide details of the sexual harassment cases received, disposed of and pending in the Board's Report. This is prescribed under Section 134 of Companies Act, 2013 ("Act") read with Rule 8 of Companies (Accounts) Rules, 2014 ("Rules").

Pursuant to the 2017 amendment to the Act and the 2018 amendment to the Rules (effective from April 1, 2021), the Board's Report is also required to state that the company has complied with the provisions relating to the constitution of Internal Committee.

Several companies today, like the house of Tata, have policies of prevention of sexual harassment for both men and women. Besides reporting compliances of POSH, CS have an opportunity to be a part of the Internal Committee and resolve issues.

Concluding Remarks
CS is one of the most noble professions as we bring accountability to the table to ensure good corporate governance. It does not limit our scope of work to compliances but we have a whole spectrum of areas lying before us in which we can specialize and becomes renowned.

It is time for us to change the perception and break through the stereotypes. We need to expand our horizons and acquire in-depth knowledge in various fields, some of which are discussed above.

In the words of George Eliot, an English novelist: It is never too late to be what you might have been. In this decade, as CS, it is our duty to start taking risks and venture into different areas of practice and to encourage our fellow CS to do so too. With great power comes great responsibilities, and we know no one can handle it better than CS.

  1. The Hindu, Explained | The clogged state of the Indian judiciary, May 13, 2022, <>

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