SEBI believes a lot of work needs to be done to improve secretarial audits in listed companies to raise corporate governance standards.
Market regulator Securities and Exchanges Board of India (SEBI) is not happy with the way secretarial audits are conducted in listed companies. It believes a lot of work needs to be done to improve the audits, which in turn, will improve corporate governance standards.
At an Institute of Company Secretaries of India (ICSI) event in Mumbai, SEBI Chairman Ajay Tyagi said, "I came across some analysis...I must admit that I was rather disappointed to see that many of the (Secretarial) audits did not report the non-compliances pointed by the stock exchanges, they did not report penalties levied by stock exchanges...they (company secretary) need to further step up the audit quality, especially for listed companies."
Meanwhile, Makarand Lele, President of ICSI, said that there is a need for improvement in secretarial audit as well as in the set format of disclosing information to exchanges and regulator. "We are working with SEBI and Ministry of Corporate Affairs to fill the gaps and fulfill the requirement of SEBI chairman."
As a process to check if a company abides by corporate laws, rules, and regulations, a secretarial audit has been added to the Companies Act, 2013. The secretarial auditor of a company will be entitled to ask officers of the company such information and explanation as may be considered necessary for the performance of his audit duties.