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Environmental, Social and Governance (ESG) - Principles and Practice · Board Processes through Secretarial Standards

Board Processes and Governance Best Practices under Secretarial Standards

Updated 11 October 2026 · Fact-checked

Board processes are the steps a board follows to meet, decide and record decisions. Secretarial Standards issued by ICSI set the minimum procedure, and section 118(10) makes them binding on companies. To answer exam questions, state the provision, apply it to the facts, then conclude with a compliance action.

Understand Board Processes and Governance Best Practices

A board decides through meetings. The law does not leave the way of meeting to chance. Notice, agenda, quorum, discussion, voting and minutes all follow a set process. This process protects directors, shareholders and the company.

Secretarial Standards are issued by the Institute of Company Secretaries of India and approved by the Central Government. Under section 118(10), every company must observe the standards on general and Board meetings. Under section 205(1)(b), the company secretary must ensure the company complies with them. So the standards are not just advice. Treat them as part of the law.

The same process applies to committees of the Board. Section 118(1) covers meetings of the Board and of every committee of the Board. A committee meeting needs proper notice, a record of who attended and a signed set of minutes, just like a Board meeting.

Minutes are the proof of what happened. Section 118(2) says they must contain a fair and correct summary of the proceedings. Section 118(4) adds that Board and committee minutes must name the directors present and the directors who dissented from, or did not concur with, each resolution. Section 118(7) and (8) say properly kept minutes are evidence of the proceedings, and the meeting is deemed duly called and held until the contrary is proved.

Best practices go beyond the minimum. Circulate the agenda and notes well in advance. Keep discussion focused on decisions. Record reasons for key decisions. Follow up on action points at the next meeting. Keep minute books safe, because tampering is a serious offence under section 118(12).

Key rules to remember

Time limit for keeping minutes
Minutes entered in the minute book within 30 days of the conclusion of the meeting (or of passing a postal ballot resolution)
Section 118(1). Pages of the minute books must be consecutively numbered.
Content of Board and committee minutes
Fair and correct summary + all appointments + names of directors present + names of dissenting or non-concurring directors for each resolution
Section 118(2), (3) and (4).
Matters the Chairman may exclude
Defamatory, irrelevant or immaterial, or detrimental to the company's interests
Section 118(5). The Chairman has absolute discretion under section 118(6).
Evidentiary value of minutes
Minutes kept as per section 118 = evidence of the proceedings; meeting deemed duly called and held until the contrary is proved
Section 118(7) and (8).
Penalty for default
Company: ₹25,000. Every officer in default: ₹5,000
Section 118(11), for each meeting in default.
Penalty for tampering
Imprisonment up to 2 years and fine from ₹25,000 to ₹1,00,000
Section 118(12).
Duty of company secretary
Report to the Board on compliance + ensure compliance with Secretarial Standards
Section 205(1)(a) and (b).

How to solve Board Processes and Governance Best Practices questions

Use this method for any case-based question on board meetings, committees or minutes.

  1. 1Identify the body: Board, committee or general meeting. Section 118 covers all, but SS-1 applies to Board and committee meetings, and SS-2 to general meetings.
  2. 2Pick out the facts: what was done, by whom, and when. Note dates, since the 30-day rule depends on them.
  3. 3State the provision: quote section 118 or 205 in plain words, and mention that Secretarial Standards bind the company under section 118(10).
  4. 4Apply the rule to each fact. Check minutes content, dissent recording, Chairman's discretion and time limits one by one.
  5. 5Conclude clearly: compliant or not, and the consequence, such as the penalty in section 118(11).
  6. 6Add a practical point: what the company secretary should draft, circulate or correct, with reference to section 205.

Quickest way: Four-check minutes test

When to use it: Use when a question gives a short fact pattern about minutes or a meeting and you have little time.

  1. Check timing: were minutes kept within 30 days?
  2. Check content: fair and correct summary, directors present, dissent named?
  3. Check exclusions: did the Chairman omit only defamatory, irrelevant or detrimental matter?
  4. Check consequence: penalty of ₹25,000 on the company and ₹5,000 on each officer in default, or tampering liability.

Common mistakes in Board Processes and Governance Best Practices

  • Saying Secretarial Standards are only recommendatory.

    Students confuse them with guidance notes.

    Fix: Cite section 118(10): every company shall observe the standards on general and Board meetings once approved by the Central Government.

  • Writing that minutes need only cover the Board meeting, not committees.

    Students link minutes only to Board meetings.

    Fix: Section 118(1) expressly covers every committee of the Board. Mention committees in your answer.

  • Forgetting to record dissent.

    Students think only the decision matters.

    Fix: Section 118(4)(b) requires the names of directors dissenting or not concurring with each resolution.

  • Thinking the Chairman can omit anything he wants.

    The words 'absolute discretion' in section 118(6) are over-read.

    Fix: The discretion applies only on the three grounds in section 118(5): defamatory, irrelevant or immaterial, detrimental to the company.

  • Mixing up the penalties.

    Two different amounts and a separate offence for tampering.

    Fix: Remember: ₹25,000 company, ₹5,000 officer in default for non-compliance; tampering is imprisonment up to two years plus fine of ₹25,000 to ₹1,00,000.

Worked examples

Example 1

Nova Textiles Ltd held a Board meeting on 5 March. The minutes were entered in the minute book on 10 May. Director Mr. Rao opposed one resolution, but the minutes did not name him. Advise the company.

Show the solution
  1. Provision: section 118(1) requires minutes to be kept within 30 days of the conclusion of the meeting.
  2. Facts: 5 March to 10 May is more than 30 days. The time limit was missed.
  3. Section 118(4)(b) requires the minutes to name directors dissenting from a resolution. Mr. Rao's dissent was not recorded, so this is also a breach.
  4. Consequence: under section 118(11) the company is liable to a penalty of ₹25,000 and every officer in default to ₹5,000.
  5. Practical step: the company secretary should correct the record through proper approval, ensure future minutes are completed in time, and report the lapse to the Board under section 205(1)(a).

Answer: The company breached section 118(1) and 118(4)(b). It faces a penalty of ₹25,000 and each officer in default ₹5,000. The company secretary should report the lapse and put controls in place.

Example 2

At a meeting of the Audit Committee of Zenith Pharma Ltd, the Chairman removed a remark by a member that a competitor's director was dishonest, and a long discussion on canteen menus. A member says the Chairman had no right to do so. Is he correct?

Show the solution
  1. Provision: section 118(5) lets the Chairman exclude matters that are defamatory, irrelevant or immaterial, or detrimental to the company's interests.
  2. Section 118(6) gives the Chairman absolute discretion on these grounds.
  3. The remark about dishonesty is defamatory. The canteen discussion is irrelevant to the committee's proceedings.
  4. Section 118(1) applies to committee meetings as well, so the same rules govern the minutes.
  5. Minutes must still hold a fair and correct summary of the proceedings under section 118(2).

Answer: The member is not correct. The Chairman acted within section 118(5) and (6) by excluding defamatory and irrelevant matter. He must still ensure the minutes give a fair and correct summary of the business actually transacted.

Exam tips

  • Quote the sub-section number for each point in section 118. It signals precision.
  • Always link the answer to the company secretary's role under section 205 when the question asks for advice.
  • In case questions, show a short table-free structure: provision, analysis, conclusion, practical step.
  • Learn the two penalty amounts and the tampering punishment exactly.
  • Mention that committees are covered, since examiners often test this gap.

Practice questions from Board Processes through Secretarial Standards

Board Processes and Governance Best Practices: frequently asked questions

Are Secretarial Standards mandatory for companies?

Yes. Section 118(10) says every company shall observe the standards on general and Board meetings that are issued by ICSI and approved by the Central Government. The company secretary must also ensure compliance under section 205(1)(b).

Within how many days must minutes be kept in the minute book?

Under section 118(1), minutes must be kept within thirty days of the conclusion of the meeting. For a postal ballot, the period runs from the passing of the resolution.

What must Board minutes contain besides the decisions?

They must contain a fair and correct summary of the proceedings, all appointments made, the names of directors present, and for each resolution the names of directors who dissented or did not concur.

Can the Chairman leave out something from the minutes?

Yes, but only if the matter is defamatory, irrelevant or immaterial, or detrimental to the company's interests. Section 118(6) gives him absolute discretion on those grounds only.