An informed investor is more precious than the investment. Investors provide the much-needed capital, which combined with entrepreneurial skills, results in successful corporate. These corporates provide goods and servic
CS Professional · Secretarial Audit, Compliance Management and Due Diligence · PYQS · June 2025
An informed investor is more precious than the investment. Investors provide the much-needed capital, which combined with entrepreneurial skills, results in successful corporate. These corporates provide goods and services, employment and fuel economic growth. Therefore, it is very important that investors are educated, enlightened and well informed to be able to take sound investment decisions and to protect their interests. Explain the role of a Company Secretary in Investor Education and Protection, as well as role in Board development of the company.
Answer & Explanation:
Role of Company Secretary in Investor Education & Protection: Recognizing the importance of shareholder rights and investor protection, the Companies Act, 2013 introduced some important changes to the company law regime in India and has plugged many loopholes. It upholds shareholders democracy and investor protection in many ways. A significant development has been the inclusion pertaining to 'Class Action Suit' (Section 245) to strengthen the concept of shareholders democracy. Under various securities laws such as - Securities Contracts (Regulation) Act, 1956, Depositories Act, 1996, regulations and guidelines issued by SEBI under SEBI Act, 1992 and The listing agreement with the stock exchanges for equity, debt listing, IDRS, Company Secretaries have been recognized to verify compliances and to issue certificates. A better regulated capital market automatically brings development for the country and a strong regulated capital market instils confidence among the investors that their money is safe. The Company Secretaries (CS) are expected to exercise sensitive professional and moral judgments in all their activities, while carrying out their professional responsibilities. They should accept the obligation to act in a way that will serve public interest, honor public trust and demonstrate commitment to professionalism. The CS is expected to maintain and broaden public confidence and perform all professional responsibilities with the highest sense of integrity Role in Board development: All directors should have access to the advice and services of the Company Secretary. The Company Secretary should build effective working relationships with all board members, offering impartial advice and acting in the best interests of the company In promoting board development, the Company Secretary should assist the chairman with all development processes including board evaluation, induction and training. This should involve implementing a rigorous annual board, committee and individual director assessment and ensuring actions arising from the reviews are completed Further, the Company Secretary should take the lead in developing tailored induction plans for new directors and devising a training plan for new directors and the board. Although these tasks are ultimately the responsibility of the chairman, the Company Secretary can add value by fulfilling, or procuring the fulfilment of, these best practice governance requirements on behalf of the chairman.
Topics: Corporate Governance
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