CS Puja Pandey speaks to the India Employer Forum about secretarial compliance and the role of technology in the compliance ecosystem.
1.Could you give us a brief overview of the company law framework in India at a broader level?
Company law in India has its origins from the British colonial era. Before that, people were involved in trading and partnerships, but there was no formal regulatory framework for companies. Building on the foundation laid by the English Joint Stock Companies Act, India enacted the Joint Stock Companies Act in 1857 which focused on joint stock companies and laid down basic requirements for forming a company, which was expanded and improved in the 1866 Act. Later, in 1913, the law was amended to include mandated audits, director accountability and detailed financial disclosures.
The major overhaul came with the Companies Act 1956. It was a comprehensive law, covering detailed provisions on the appointment of directors, rigorous auditing practice, and stringent annual filings. This remained in place until 2013 when it was replaced by the Companies Act of 2013, which introduced significant updates, particularly in corporate governance. The act introduced new governance measures such as the mandatory formation of audit committees, nomination and remuneration committees (NRCs), and the inclusion of a comprehensive framework on independent directors, emphasizing their role in enhancing corporate governance, protecting shareholder interests, and ensuring accountability.
Further, provisions for Corporate Social Responsibility (CSR) making CSR contributions mandatory—2% of the company’s net profit must be contributed to CSR activities, which was initially voluntary and the concept of secretarial audits came into the picture. The Act applies across India and extends to foreign companies with significant Indian ownership. It also introduced the concept of a One Person Company (OPC), marking a significant shift in the regulatory landscape for entrepreneurs.
2.What are the specific challenges of secretarial compliance, especially in larger organisations?
The company secretaries deal with their own set of challenges, particularly when it comes to secretarial compliances with stringent timelines, like identifying the material events, ensuring specified stock exchange compliances within thirty minutes of the conclusion of Board meetings, pre and post intimations for regular analyst meetings etc. In larger organisations, the secretarial team often operates separately from the legal team due to the large volume of data requiring integrity. However, collaboration between the teams is crucial.
Another area for the secretarial function is managing board meetings and general meetings, preparation of annual reports, ensuring timely form filings and ensuring effective corporate governance. For listed companies, compliance becomes even more critical with Securities and Exchange Board of India (SEBI) Regulations. SEBI has recently introduced provisions on market price movements, which require constant monitoring of trading patterns. SEBI’s primary focus is on protecting the interests of shareholders and other stakeholders. Listed companies must follow these provisions strictly as even minor lapses can result in substantial penalties and other repercussions.
For large companies, compliances like monitoring insider trading, IEPF matters, corporate governance reports, shareholding patterns, and disclosure on related party transactions can be time-consuming and can involve a dedicated team to manage these regulatory requirements.
3.Why do larger organisations tend to have separate compliance teams for different functions, while smaller organisations have a consolidated team?
As I mentioned, in larger organisations, the volume of compliances is significantly higher with more activities and larger operations, which makes it challenging for a single team to manage all aspects effectively. For example, top-listed companies have numerous filings and regulatory requirements. These companies often have a separate team for secretarial compliance and another team for legal, labour, financial, and environmental compliance. Each function has its own set of specialised requirements, and separating the teams allows for more efficient management.
In smaller organisations, it’s more common to have a consolidated compliance team handling multiple functions because the volume of work is lower and has less complexities. Additionally, with fewer layers of management, everyone is often on the same page regarding compliance issues fostering clear communication and quick decision-making. But in large conglomerates, it becomes crucial to have separate teams due to the scale of operations and the risk of non-compliance.
4.You’ve worked with conglomerates that have multiple subsidiaries. How do large organisations manage compliance across different industries within their group?
Compliance management varies from company to company. In instances, where there are only a few subsidiaries, such as in my experience with India’s leading footwear brand, the secretarial team can effectively manage compliance across all entities due to the lower number of group company requirements.
However, in larger conglomerates, like the top listed company of India, which has over 500 subsidiaries, it’s impractical for the central team to manage every aspect of compliance effectively. In these situations, each subsidiary may have its own compliance team to ensure regulatory adherence, which in turn reports to the group-level company secretary. This is important as even minor non-compliance by a subsidiary can significantly affect the reputation of the holding company. This structure enables the central secretarial team to efficiently manage and consolidate reports for disclosures, related party transactions, data collation, and board meetings at the group level. For larger organisations with multiple listed subsidiaries, it may be necessary to have dedicated teams for each entity, given the complexity of managing SEBI requirements.
5. What has changed in the last year, particularly in the secretarial compliance ecosystem?
In the past year, the secretarial compliance ecosystem has seen substantial changes. Regulatory bodies such as SEBI and the Ministry of Corporate Affairs have introduced several important amendments aimed at enhancing transparency and accountability. These developments have encouraged companies to re-evaluate their compliance frameworks, leading to the formation of more specialized compliance teams.
That said, there has been a strong focus on digital solutions to streamline reporting and improve data management. This helps organizations navigate complex regulations, ensuring timely compliance and reducing risks. Overall, these changes have strengthened the compliance framework and better-prepared companies for new challenges.
6.How do you manage the large number of regulatory updates from various authorities like SEBI, NSDL, and others? What are the best practices your organisation follows to ensure compliance?
The approach really depends on the size of the organisation. In smaller organisations, where the secretarial team might consist of just two or three people, they can manage by directly tracking the relevant laws. For example, a private company would primarily focus on the Companies Act and updates from the Ministry of Corporate Affairs (MCA). If the company is listed, they’d also track SEBI’s updates and listing regulations. If it’s an NBFC, for instance, they’d have to comply with RBI directions or regulations, including sector-specific rules like scale-based regulations.
Smaller firms can manage this internally, but mid-sized organisations might need external tools or services, such as compliance software, to track regulatory changes. Tools like checklists ensure that all departments (tax, MIS, etc.) are on top of their specific compliance needs, and compliance officers can review these to ensure 100% adherence. In larger organisations, compliance becomes more complex, and they often build their own tech-driven systems with a dedicated team to manage and monitor compliance efficiently.
7.What role do you think technology plays in ensuring compliance, and what would your ideal compliance ecosystem look like?
Technology plays a huge role in easing compliance efforts. For instance, when I was working at a company listed on the Calcutta Stock Exchange, initially, we had to submit physical filings via hand delivery or courier. Once they upgraded their systems, everything transitioned online, making compliance much easier and faster.
Having said that, the adoption of technology has significantly reduced the prevalence of document backdating that was possible in the past due to less advanced systems. With digital solutions and automated processes, organizations can now track the creation and modification of documents more accurately, restricting any alteration to data.
Inhouse, technology has been pivotal in tasks like preparing board meeting agendas or filing minutes. Before automation, we had to print and manually bind hundreds of pages of documents, consuming both time and resources. Now, with board meeting software, directors can access agendas online, and annotate comments in minutes, saving time and increasing efficiency.
Furthermore, data management has become a breeze with cloud storage and other digital repositories. We can store all compliance-related documents securely and access them whenever needed. Automation has also become essential with the introduction of requirements like the SEBI PIT (Prohibition of Insider Trading) Regulations requiring to maintain structured digital databases. Therefore, in addition to the regulatory updates, the Compliance officers must also stay updated on technological tools to pace up with evolving regulations.
8.You’ve touched on corporate governance. How do you see governance practices differing between older, established organisations and newer, more agile firms?
In older organisations, governance practices are usually well established because they have years of experience and have developed a rigorous compliance framework. Their governance systems are typically robust and stable.
In contrast, newer organisations are more focused on agility and market entry, which can sometimes lead to differences in governance practices. However, corporate governance is equally important for both large and small companies. It’s not just about meeting legal requirements; it’s about transparency, accountability, responsibility, and sustainability.
Transparency builds stakeholder’s trust. Disclosures, such as those mandated by SEBI’s September 9, 2015 circulars which are now part of SEBI Master July 11, 2023, ensure that companies provide detailed information about material events specified by SEBI.
Responsibility is also key—whether in product safety or environmental impact, companies must act in the interest of all stakeholders. Similarly, accountability and maintaining high ethical standards are essential for the sustained growth of any organisation.
In a nutshell, effective governance is the cornerstone of an organisation, crucial for long-term success and sustainability.
9.For young professionals entering the compliance field, what advice would you offer to help them start their careers on the right foot?
My first piece of advice would be to stay updated with regulatory amendments. Use websites like the MCA and SEBI portals to track notifications, circulars, and updates on various regulations. SEBI also publishes guidance notes that help professionals understand the intent behind specific laws. It’s important for freshers to read these to get a better grasp of how regulations work in practice.
Further, when applying for jobs, always take the time to write a proper email with a clear subject line and a well-structured body. Highlight your strengths or any specific accomplishments to make your application stand out.
Also, stay proactive during interviews by showing you’ve done your homework. For example, before applying to a listed company, check their filings and updates on platforms like the Company’s website, BSE and NSE websites. This not only prepares you for technical interview questions but also demonstrates your initiative. While targeting a career in an NBFC, familiarise yourself with the relevant circulars and master directions of RBI.
Additionally, you can get some educational training and mentorship from experienced professionals, either through LinkedIn or personal networks, to get a real-world understanding of compliance functions.
It’s essential for new employees to familiarise themselves with the company’s code of conduct, as well as their rights, responsibilities, and available perks. Understanding the provisions of the POSH Act is very crucial. I believe it’s the organization’s responsibility to train freshers on this topic, as they can often be the most vulnerable due to a lack of awareness about their rights.
Besides, I believe it’s important for newcomers to find joy in their work. When they enjoy what they do, it leads to their best performance. Lastly, engaging in activities outside of work is vital for mental health. I encourage young professionals to make time for hobbies and interests, as this fosters a healthier work-life balance and enhances overall well-being.
As we wrap up this conversation, I want to highlight that our curriculum itself places a strong emphasis on ethics and integrity. Young professionals should always prioritise governance in their workplace.
Thank you for allowing me to share these insights!
About CS Puja Pandey
Ms. Puja Pandey is an accomplished professional with extensive expertise in corporate governance, secretarial work, and legal & regulatory compliances. Her experience includes working with companies such as Annapurna Finance and Bata. Her experience spans managing ROC and Stock Exchange filings, ensuring corporate actions are fully compliant with evolving legal standards. She excels in governance matters, drafting and vetting legal documents, and administering regulatory frameworks to maintain organizational transparency. With a strong understanding of corporate legislation, Ms. Puja also brings exceptional interpretational, analytical, and communication skills. She is adept at managing investor relations, fostering trust through clear reporting, and demonstrating leadership potential by driving cross-functional collaboration and promoting a culture of compliance across the organization. Her strategic approach and commitment to excellence make her a valuable asset in any corporate setting. In addition to her professional achievements, she enjoys incorporating yoga including aerial yoga and meditation into her daily routine and has a passion for singing.
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Disclaimer: The opinions and views expressed in this article, including any accompanying data, are the sole responsibility of the author and should not be construed as reflecting the official policy or position of India Employer Forum.
