Company Secretary: Enhanced Roles And Increased Demand In Wake Of The New Companies Act
Company Secretary is a senior administrative position in a company and is a vital link between various stakeholders, such as the board of directors and the shareholders, and between the company and various government agencies. Though the name suggests otherwise, the role is neither secretarial nor clerical. With the amendments brought about in the new Companies Act, a company secretary is designated as a key managerial position at par with a chief operating officer, chief financial officer, etc.
Under the new Companies Act, their roles and responsibilities have been considerably enhanced; it is immaterial whether they are in practice or in employment. Now, a company secretary in delhi has a plethora of opportunities as their demand has seen a significant increase over the last few years.
Roles and Responsibilities
Traditionally, its main role has been the efficient administration of a company along with statutory and regulatory compliance. He/she also has to ensure that the decision of the board of directors is properly implemented, that the directors and senior management of the company function within the purview of the applicable laws. They are also responsible for maintaining the amicable relationship between the shareholders and the company, and that all their concerns are addressed in a timely manner. Additionally, they are responsible for efficiently organizing and conducting board meetings and recording the minutes thereof.
Now, with the changes that have been incorporated in the new Companies Act, the roles and responsibilities have been completely redefined. He/she is now designated as key managerial personnel. Their responsibilities have increased immensely, and they are expected to perform more than just routine compliance work, such as conducting meetings and maintaining minutes thereof, etc.
To shoulder the added responsibilities they need to keep themselves updated with the constantly changing rules and regulations and new dew developments in the business world. They should develop sound reasoning, analytical, interpretational and decision making skills to stand the test of time.
With the introduction of the new Companies Act and various amendments to it, several changes have come into effect. Most noteworthy is the removal of the mandatory clause for limited companies to have in-house company secretary and general counsel services in their rolls. An only certain class of companies are legally bound to appoint a whole-time company secretary. This class of companies includes those which are listed on stock exchanges or those which have a paid-up share capital of Rs 5 crore or more. Companies that do not come under this mandatory clause can outsource company secretarial services to meet their compliance and regulatory and statutory requirements.
With more strict norms coming into effect with the implementation of the new Companies Act, and as companies prepare to beef up governance the demand for company secretaries has significantly increased over the years. Demand for both, in-house company secretary and outsourced secretarial services have seen a quantum jump in the last few years.
As the new Companies Act takes effect, companies are setting up secretarial teams much the same as any other business vertical. The Act modified or replaced several rules that were there for almost six decades and contains stricter diligence norms. This has led companies to more actively involve secretarial services to ensure compliance with the new rules. Another reason for the increased demand is that new-age companies and corporate leaders have set their priorities on compliance and good governance.
Although the demand for company secretarial services has shown significant improvement, both for in-house and outsourced services, there is a realization among company management that an in-house compliance officer is more suitable to shoulder the responsibility allowing them to focus their unbridled attention on business matters. Apart from demand from companies who are looking to hire company secretaries for the first, even companies that already have in-house secretaries are looking to beef up their troupe by hiring someone who can have an executive presence, as mandated by the clause of key managerial personnel. To augment their team they are hiring personnel who are smart and articulate and can easily and comfortably liaise with the directors and shareholders.
The demand grown so much that there is a shortage of qualified personnel to fill the vacancies. There is a limited talent pool; currently, there are almost 4,00,000 students enrolled in the qualifying course of the ICSI, but only about 40,000 practicing professionals. It is expected that this year around 3000 to 3500 would qualify to become company secretaries.
Company Secretaries have always been paid good compensation, but with their demand soaring over the years, compensations have also increased considerably. Large firms have requirements of 15 to 20 personnel, and there is only a limited talent pool to cater to their demands. At the senior-most level, a company secretary in Delhi can earn anywhere between Rs 1.25 to 1.5 crores. At the second level, the salary ranges from 50 to 80 lakhs per annum. Salaries also vary according to the complexities and challenges of the business environment a company operates in.
To sum it up, the roles of company secretaries have become more important and their demand has also increased considerably, which ultimately has resulted in 50 to 60 per cent upward revision in their compensation packages.