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

Orchid Steel Ltd is a listed company. Its Board, MD and chairperson are arguing about who answers for compliance with secretarial standards, given that the company secretary must ensure it under section 205. Which statement is correct under the Companies Act, 2013?

The company secretary's duty to ensure compliance and the secretarial audit do not displace anyone else. Section 205(2) says sections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time director under the Act or any other law.

  1. ASections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time director under the Act or any other lawCorrect
  2. BThe company secretary's duty under section 205 transfers all liability for non-compliance away from the Board and the managing director
  3. CThe secretarial audit report under section 204 replaces the Board's obligation to observe secretarial standards
  4. DThe chairperson is relieved of duties relating to meetings once a company secretary is appointed

Explanation

Section 205(2) provides that sections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time director. So the company secretary's role is additional and does not shift their responsibilities. The other options wrongly claim a transfer or replacement of those duties.

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