Environmental, Social and Governance (ESG) - Principles and Practice · Empowerment of the Company Secretary Profession

Role of Company Secretary in ESG and Governance

Updated 11 October 2026 · Fact-checked

The company secretary is the governance professional who reports to the Board on compliance with the Companies Act, rules and other applicable laws, and ensures the company follows ICSI secretarial standards (Section 205). In ESG, the CS extends this role: advising on ethics, stakeholder matters and sustainability disclosures, and linking the Board to compliance.

Understand Role of Company Secretary in ESG and Governance

A company has many people who act for it. The Board decides. Management runs the business. The company secretary sits between them and the law. The CS makes sure that decisions are taken in the right way, recorded properly and carried out within the legal framework.

The core legal base is Section 205. It says the functions of the company secretary include reporting to the Board about compliance with the Companies Act, the rules and other laws applicable to the company. It also includes ensuring that the company complies with applicable secretarial standards, and discharging other prescribed duties. Secretarial standards here mean those issued by the ICSI and approved by the Central Government.

Section 205(2) adds a limit. Sections 204 and 205 do not take away the duties and functions of the Board, the chairperson, the managing director or the whole-time director. So the CS advises and reports. The CS does not replace the Board's responsibility.

ESG widens the same role. Governance is the 'G', and the CS is at its centre: Board meetings, general meetings, committees, disclosures and policies. For 'E' and 'S', the CS helps the Board set up policies, committees and reporting, and checks that the company meets its legal duties on matters such as CSR, vigil mechanism, stakeholder grievances and sustainability reporting. Note that the Act text speaks of compliance and standards. Words like 'conscience of the company' or 'ESG champion' describe the practical role; they are not statutory phrases.

The profession is also given standing in law in other ways. A Producer Company with an average annual turnover above ₹5 crore (or such other amount as may be prescribed) in each of three consecutive financial years must have a whole-time secretary who is an ICSI member (Section 378X). Company secretaries in practice are also eligible, with fifteen years of practice, to be Technical Members of the Tribunal (Section 409(3)(d)). The Tribunal's technical-member route shows how the Act trusts the profession's expertise.

Key rules to remember

Functions of CS (Section 205(1)): (a) report to the Board on compliance with the Act, rules and other applicable laws; (b) ensure compliance with applicable secretarial standards; (c) other prescribed duties; Learn the three limbs in this order. Secretarial standards means those issued by ICSI and approved by the Central Government.
Limit on the CS role (Section 205(2)): Sections 204 and 205 do not affect the duties and functions of the Board, chairperson, MD or whole-time director; Use it to say the CS advises and reports; responsibility stays with the Board.
Whole-time secretary of Producer Company (Section 378X): Average annual turnover > ₹5 crore (or prescribed amount) in each of 3 consecutive financial years → whole-time secretary, who must be an ICSI member; Penalty for default: ₹100 per day, maximum ₹1 lakh, for the company and every officer in default. No penalty if reasonable efforts were made or the company could not afford one.
CS as Technical Member of Tribunal (Section 409(3)(d)): Is, or has been, in practice as a company secretary for at least 15 years; One of several routes to Technical Member; other routes include CA and cost accountant practice for 15 years.

How to solve Role of Company Secretary in ESG and Governance questions

Questions on this topic are case-based or ask you to discuss the role. Use a provision-analysis-conclusion structure.

1Read the facts and identify what the question tests: a statutory function, an advisory role in ESG, or a conflict between CS and Board.
2State the provision first: Section 205(1) functions, and Section 205(2) if responsibility is in question.
3Name the specific duty in play: reporting on compliance, secretarial standards, or a prescribed duty.
4Apply it to the facts. Say what the CS should do: advise the Board, put the point in writing, flag non-compliance, check the process.
5Add the ESG or governance link where relevant: committees, disclosures, stakeholder grievance, ethics policy, sustainability reporting.
6Add practical drafting or compliance points: note to the Board, agenda item, minutes entry, checklist.
7Close with a clear conclusion in one or two sentences.

Quickest way: Three-limb answer frame

When to use it: When time is short and the question asks you to discuss or explain the CS role in governance or ESG.

Write the Section 205(1) limbs in one line each.
Add one line on Section 205(2): the Board remains responsible.
Give two or three practical ESG or governance tasks tied to the facts.
End with a one-line conclusion.

Common mistakes in Role of Company Secretary in ESG and Governance

Saying the CS is responsible for the company's compliance failures in place of the Board.
Students read 'report on compliance' as 'ensure all compliance'.
Fix: Section 205(1)(a) is about reporting to the Board. Section 205(2) keeps the Board's, chairperson's and MD's duties intact.
Writing that the CS ensures compliance with 'all standards', including accounting standards.
The word 'standards' is used in many places.
Fix: Section 205(1)(b) refers to secretarial standards issued by ICSI and approved by the Central Government.
Quoting section numbers for ESG duties that are not in the Act text.
Students try to fit every ESG task under Section 205.
Fix: Cite Section 205 for the statutory functions. Describe ESG advisory tasks in plain words as practice, not as separate sections.
Mixing up Section 378X with the rule for every company.
Both deal with company secretaries.
Fix: Section 378X applies to Producer Companies only, with the turnover test of ₹5 crore (or prescribed amount) for three consecutive years.
Giving a general essay with no facts applied.
Students memorise notes and skip analysis.
Fix: Tie each point to a fact in the question: the company, the issue, the document the CS should prepare.

Worked examples

Example 1

Meridian Textiles Ltd, an unlisted public company, plans to approve a related-party contract at a Board meeting. The CFO tells the company secretary to leave the item off the agenda because 'the Board will only waste time'. Advise the company secretary.

Show the solution

Provision: Under Section 205(1)(a), the CS must report to the Board about compliance with the Act, rules and other applicable laws. Under Section 205(1)(b), the CS must ensure compliance with applicable secretarial standards.
Analysis: The CFO is not the Board. The CS has a statutory duty to the Board, not to a single officer. If the contract needs Board consideration under law, leaving it off the agenda would defeat the duty to report on compliance and could breach the process required by secretarial standards on Board meetings.
Section 205(2) shows the Board's duties remain with the Board, so the Board must be given the chance to decide.
Practical points: The CS should record the objection in writing, place the item on the agenda with the supporting papers, and note the legal requirement in the explanatory note. If the CFO insists, the CS should inform the chairperson.
Conclusion: The CS should not drop the item and should put it before the Board.

Answer: The CS must include the item and report the compliance position to the Board under Section 205(1). The CFO cannot override that duty.

Example 2

The Board of Kaveri Agro Ltd asks the company secretary to help build a governance and ESG framework. Explain how the CS can contribute, and where the CS role stops.

Show the solution

Provision: Section 205(1) lists reporting on compliance, secretarial standards and other prescribed duties. Section 205(2) says the Board's, chairperson's and MD's duties are unaffected.
Governance contribution: The CS prepares Board and committee calendars, agendas and minutes in line with secretarial standards, tracks applicable law, and reports compliance status to the Board.
ESG contribution (practice role): The CS can advise on policies such as code of conduct, vigil mechanism and stakeholder grievance handling, support the working of committees such as the CSR Committee and the Stakeholders Relationship Committee, and coordinate sustainability disclosures and the information needed for them.
Limit: The CS advises and reports. Strategy, risk appetite and approval of policies remain Board decisions. The CS cannot take over the duties of directors.
Conclusion: The CS is a governance professional and adviser who helps the Board meet its duties, not a substitute for the Board.

Answer: The CS contributes by managing governance process, reporting on compliance, and advising on ethics, stakeholder and sustainability matters. The Board remains responsible for decisions (Section 205(2)).

Exam tips

Always open with Section 205(1) and list the three limbs. Examiners look for the provision first.
Use Section 205(2) whenever a question hints that the CS is being blamed or given too much power.
Give a section number only when it is in the Act text you know: Sections 205, 378X and 409 are the safe ones here.
Add one practical drafting point, such as a written note to the Board or an agenda item, to show application.
In ESG discussion questions, separate what the law says from what good practice suggests.

Practice questions from Empowerment of the Company Secretary Profession

Role of Company Secretary in ESG and Governance in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Role of Company Secretary in ESG and Governance: frequently asked questions

What does Section 205 say about the company secretary?

It says the CS's functions include reporting to the Board about compliance with the Act, the rules and other applicable laws, and ensuring compliance with applicable secretarial standards. The CS also discharges other prescribed duties. The section does not affect the duties of the Board, chairperson, MD or whole-time director.

Is the company secretary responsible for ESG compliance?

The Board is responsible. The CS advises the Board, helps design policies and processes, and reports on compliance. The statutory functions are those in Section 205; ESG advisory work is the practical extension of that role.

What are secretarial standards under Section 205?

They are standards issued by the Institute of Company Secretaries of India and approved by the Central Government. The CS must ensure that the company complies with the applicable ones.

Must every company have a company secretary?

This page covers Section 205 and the Producer Company rule in Section 378X. Section 378X requires a whole-time secretary, who must be an ICSI member, for a Producer Company above the turnover limit. For other companies, check the appointment provisions in the Act and rules on key managerial personnel.