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

Sunrise Textiles Ltd, a listed company, has just appointed a new company secretary. The Managing Director says the secretary's only task is to record minutes and that compliance with secretarial standards is the Board's job alone. Under the functions of a company secretary set out in the Companies Act, 2013, which statement is correct?

The company secretary must ensure the company complies with applicable secretarial standards and must report to the Board on compliance with the Act, rules and other applicable laws. The role is not limited to minute-taking, and it does not displace the Board's own duties.

  1. AThe company secretary must ensure that the company complies with the applicable secretarial standards, and must also report to the Board on compliance with the Act and other applicable lawsCorrect
  2. BThe company secretary is responsible only for minute-taking, and compliance with secretarial standards rests solely with the Managing Director
  3. CThe company secretary reports compliance only to the shareholders at the annual general meeting, not to the Board
  4. DThe company secretary's functions replace the duties of the Board and the chairperson in respect of compliance

Explanation

Section 205(1) says the functions of the company secretary include reporting to the Board about compliance with the Act, the rules and other applicable laws, and ensuring that the company complies with applicable secretarial standards. The MD's view is wrong because the role is wider than minute-taking. The option saying the secretary replaces the Board's duties is also wrong, since section 205(2) preserves the duties of the Board, chairperson, MD and whole-time directors.

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