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Published on 10 April 2025

Revised Secretarial Standards 2024: Key Updates for Corporate Governance in India

Introduction

The Institute of Company Secretaries of India (ICSI) plays a crucial role in defining corporate governance practices in India. In January 2024, the institute introduced a revised edition of the Secretarial Standards designed to enhance clarity, relevance, and compliance within the corporate sector. This article provides a comparative analysis of the updates in the revised standards, focusing on their implications for company secretaries and the wider corporate environment.

Understanding the Significance

Secretarial Standards are foundational for ensuring transparent and efficient corporate governance. They outline guidelines and procedures for various corporate secretarial functions, promoting consistency and uniformity among companies. As regulatory frameworks evolve, regular updates to the standards are essential to tackle emerging challenges and align with global best practices.

Key Revisions in Secretarial Standards

Secretarial Standard-1 (Meeting of Board of Directors)

  • Scope

    • SS-1 (Second Version 2017): Applicable to all companies incorporated under the Act, excluding One Person Companies (OPC) with one director and Section 8 companies.
    • SS-1 (Third Version 2024): Retains prior scope but adds specific exemptions for Section 8 and private companies, conditional on no defaults in filing Financial Statements or Annual Return. This amendment aligns with the MCA notification dated July 5, 2017.

  • Notice (Clause 1.3.4)

    • Previous Version: Directors could notify attendance through electronic means at the start of the calendar year.
    • Revised Version: Directors may still attend in person despite notifying electronic attendance, provided they inform the company in advance.

  • Quorum (Clause 3.3)

    • Previous Version: Directors were prohibited from electronic participation on excluded business items.
    • Revised Version: Electronic participation is restricted to ensure a quorum in discussions about certain business items that require physical presence.

  • Notice (Clause 1.3.7)

    • Previous Definition of Unpublished Price Sensitive Information (UPSI) included material events per the listing agreement.
    • Revised Version: The definition omits material events in accordance with the listing agreement.

  • Frequency of Meetings (Clause 2.1)

    • Previous Version: One Person Company, Small Company, or Dormant Company needed to conduct one meeting each half of the year.
    • Revised Version: Additionally allows private companies recognized as Start-Ups to hold one meeting per half-year, reducing the requirement from four meetings annually, in line with exemptions from MCA notifications.

  • Meeting of Independent Directors (Clause 2.3)

    • From a requirement to meet once a year, it now specifies a financial year without the presence of non-independent directors, reflecting MCA’s July 5, 2017 notification.

  • Quorum (Clause 3.2)

    • Previous Version: A director interested in a business item could not be counted for quorum.
    • Revised Version: Such directors can now participate, contingent upon disclosing their interest.

Secretarial Standard-2 (General Meetings)

  • Scope

    • SS-2 (Second Version 2017): Applicable to all companies except OPC and Section 8 companies.
    • SS-2 (Third Version 2024): Maintains this scope and adds specific exemptions for private and government companies pending no defaults in filings, consistent with MCA notifications.

  • Definitions (Ordinary Business)

    • Clarified that ordinary business in Annual General Meetings includes the consideration of financial statements and reports, appointment of directors, and auditor remuneration.

  • Notice (Clause 1.2.4)

    • Revised Version allows unlisted companies to hold AGMs anywhere in India with prior written or electronic consent from all members.

  • Voting

    • Related party members’ voting rights have been clarified and exceptions for certain government company transactions have been expanded, adhering to MCA notifications.

  • Postal Ballots (Clause 16.1)

    • Provisions are set for companies with up to 200 members to transact business via postal ballot, also accommodating general meetings when e-voting is provided.

  • Rescinding Resolutions (Clause 16.8)

    • Revised version now includes that resolutions passed by postal ballot can also be rescinded through general meetings if required.

Conclusion

The revised Secretarial Standards introduced by ICSI in 2024 mark a significant advancement in strengthening corporate governance. The detailed amendments discussed have critical implications for company secretaries, ensuring they align with evolving regulatory frameworks. As the corporate environment continues to change, these standards will guide practitioners and organizations towards compliance and transparency while adhering to global best practices. It is recommended that company secretaries and stakeholders thoroughly review these updates to adeptly navigate the complexities of the revised Secretarial Standards.

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