With the approval of the new Company law passed by Rajya Sabha on Thursday, CS SN Ananthasubramanian, president, council of the ICSI said: “The new law is a progressive and forward looking one.
It promises improved corporate governance norms, enhanced disclosures and transparency, and increase in the accountability of companies’ management and auditors.”
He added that this law would facilitate responsible entrepreneurship and Corporate Social Responsibility (CSR) among the companies and stricter enforcement processes. “The act also protects the interest of investors, particularly small and minority investors, thus promoting better shareholder democracy,” he said
A significant move in the law is the change in discourse from control to self- regulation. “It presents a paradigm shift in the way every stakeholder in a corporation has to think, act and perform. This transports India into the big league as far as corporate democracy is concerned. India has transcended into the frontline space in corporate legislation and would pave the way for increase in investment propositions,” Ananthsubramanian added.
The new bill will replace the existing statute for governance of companies in the country, ie, the Companies Act, 1956. “The new law will further accelerate the transformation of company secretaries to corporate governance professionals by recognising them as key managerial persons in a company along with the chief executive officer or managing director, whole-time director and chief financial officer. The Company Secretary is expected to become the Chief Governance Officer of the Company and lead the governance initiatives.”