CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Processes through Secretarial Standards
Meridian Textiles Ltd's Board is meeting next week. Its Company Secretary, Ms. Ananya Rao, notices that the draft notice does not follow the applicable Secretarial Standards on Board meetings. Which statement best describes her responsibility under Section 205?
The Company Secretary must ensure the company complies with applicable secretarial standards. Under Section 205, these are standards issued by ICSI and approved by the Central Government. The duty exists by law and does not depend on a Board resolution or on the Chairperson alone.
- AShe has no duty, because compliance with secretarial standards rests only with the Chairperson
- BShe must ensure that the company complies with the applicable secretarial standards, being those issued by ICSI and approved by the Central GovernmentCorrect
- CShe may ignore the standards unless the Board passes a resolution adopting them
- DHer duty is limited to reporting the lapse to the auditors after the meeting
Explanation
Section 205(1)(b) makes it a function of the company secretary to ensure that the company complies with the applicable secretarial standards. The Explanation defines these as standards issued by ICSI and approved by the Central Government. Option A is wrong because Section 205(2) preserves the Chairperson's duties but does not remove the CS's function.
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