'Sebi norms on secretarial audit to improve corp governance, transparency'
New Delhi: The latest norms of markets regulator Sebi on secretarial audit will help improve transparency in corporate governance practices as well as empower company secretaries to report "everything" related to compliances, according to company secretaries' apex body ICSI.
Every listed entity and its material unlisted subsidiaries have to undertake secretarial audit and also submit a secretarial audit report along with its annual report with effect from the year ending March 31, 2019. The secretarial audit and the report has to be done by a practising company secretary, as per the Sebi. Regarding the circular, the regulator said that would help improve governance and transparency.
"One of the most important component of (corporate) governance is transparency. You should be transparent and fair to your stakeholders. Transparency will improve as far as compliance and governance are concerned," ICSI President Ranjeet Pandey said.
While secretarial audit is still done at companies, the report is submitted to a company's management is not in an elaborate format. Acknowledging that accountability is less in the current framework for secretarial audit, Pandey said if general statements are given, then the point of interpretation becomes more than the substance.
"Now, we (company secretaries) will have to be very clear about our thoughts about what we are reporting. It will be supported by annexures, which will be more detailed ones," he noted.