Decoding Secretarial Standards – Chairperson

In my earlier post here I have raised some issues related to issuance of secretarial standards. As these are curable technical issues. I continue my study of these Secretarial Standards.

In this post, I will discuss Secretarial Standards related to Chairperson under SS – 1 and SS – 2.

Chairman:

For SS – 1, Chairman means the Chairman of the Board or its Committee, as the case may be, or the chairman appointed or elected for a meeting.

For SS – 2, Chairman means Chairman of the Board or the Chairman appointed or elected for a Meeting.

As a term “Chairman” always faces criticism being a sexist term and terms “chairperson” and “chair” are preferable substitutes. Though the Companies Act 2013 also uses term chairman but secretarial standards should take some lead.

Chairman of the Meeting of the Board:

The Chairman of the company shall be the Chairman of the Board. If the company does not have a Chairman, the Directors may elect one of themselves to be the Chairman of the Board. [Paragraph 5.1.1 of SS – 1]

It is not clear who is “chairman of the company” as term chairman is defined not “chairman of the company”.

The Chairman of the Board shall conduct the Meetings of the Board. If no Chairman is elected or if the Chairman is unable to attend the Meeting, the Directors present at the Meeting shall elect one of themselves to chair and conduct the Meeting, unless otherwise provided in the Articles. [Paragraph 5.1.1 of SS – 1]

Chairman of the Company, Chairman of the Board, Chairman of the meeting and Chairman of the item in which chairman is interested are the list of probable persons in the Chair.

It would be the duty of the Chairman to check, with the assistance of Company Secretary, that the Meeting is duly convened and constituted in accordance with the Act or any other applicable guidelines, Rules and Regulations before proceeding to transact business. The Chairman shall then conduct the Meeting. The Chairman shall encourage deliberations and debate and assess the sense of the Meeting. [Background Paragraph 1 after Paragraph 5.1.2 of SS – 1]

If the Chairman is interested in any item of business, he shall, with the consent of the members present, entrust the conduct of the proceedings in respect of such item to any Dis-interested Director and resume the Chair after that item of business has been transacted. The Chairman shall also not be present at the Meeting during discussions on such items. [Background Paragraph 2 after Paragraph 5.1.2 of SS – 2]

In case some of the Directors participate through Electronic Mode, the Chairman and the Company Secretary shall safeguard the integrity of the Meeting by ensuring sufficient security and identification procedures. No person other than the Director concerned shall be allowed access to he proceedings of the Meeting where Director (s) participate through Electronic Mode, except a Director who is differently abled, provided such Director requests the Board to allow a person to accompany him and ensures that such person maintains confidentiality of the matters discussed at the Meeting. [Background Paragraph 3 after Paragraph 5.1.2 of SS – 2]

Unless otherwise provided in the Articles, in case of an equality of votes, the Chairman shall have a second or casting vote. [Background Paragraph 4 after Paragraph 5.1.2 of SS – 2]

Chairman of Meetings of Committees:

A member of the Committee appointed by the Board or elected by the Committee as Chairman of the Committee, in accordance with the Act or any other law or the Articles, shall conduct the Meetings of the Committee. If no Chairman has been so elected or if the elected Chairman is unable to attend the Meeting, the Committee shall elect one of its members present to chair and conduct the Meeting of the Committee, unless otherwise provided in the Articles. [Paragraph 5.2 of SS – 2]

Chairman of General Meetings:

The Chairman of the Board shall take the chair and conduct the Meeting. If the Chairman is not present within fifteen minutes after the time appointed for holding the Meeting, or if he is unwilling to act as Chairman of the Meeting, or if no Director has been so designated, the Directors present at the Meeting shall elect one of themselves to be the Chairman of the Meeting. If no Director is present within fifteen Minutes after the time appointed for holding the Meeting, or if no Director is willing to take the chair, the Members present shall elect, on a show of hands, one of themselves to be the Chairman of the Meeting, unless otherwise provided in the Articles. [Paragraph 5.1 of SS – 2]

In paragraph 5.1 of SS – 2, simple statement, “the Chairman of the Board shall take the chair and conduct the Meeting” will suffice. Otherwise, definition of “chairman” may be removed from these standards.

Chairman of the Board and Chairman of the meeting are two options here.

If a poll is demanded on the election of the Chairman, it shall be taken forthwith in accordance with the provisions of the Act and the Chairman elected on a show of hands shall continue to be the Chairman of the Meeting until some other person is elected as Chairman as a result of the poll, and such other person shall be the Chairman for the rest of the Meeting. [Background Paragraph 1 after Paragraph 5.1 of SS – 2]

The Chairman shall ensure that the Meeting is duly constituted in accordance with the Act and the Articles or any other applicable laws, before it proceeds to transact business. The Chairman shall then conduct the Meeting in a fair and impartial manner and ensure that only such business as has been set out in the Notice is transacted. The Chairman shall regulate the manner in which voting is conducted at the Meeting keeping in view the provisions of the Act. [Background Paragraph 2 after Paragraph 5.1 of SS – 2]

The Chairman shall explain the objective and implications of the Resolutions before they are put to vote at the Meeting. [Paragraph 5.2 of SS – 2]

The Chairman shall provide a fair opportunity to Members who are entitled to vote to seek clarifications and/or offer comments related to any item of business and address the same, as warranted. [Background Paragraph 1 after Paragraph 5.2 of SS – 2]

In case of public companies, the Chairman shall not propose any Resolution in which he is deemed to be concerned or interested nor shall he conduct the proceedings for that item of business. [Paragraph 5.3 of SS – 2]

If the Chairman is interested in any item of business, without prejudice to his Voting Rights on Resolutions, he shall entrust the conduct of the proceedings in respect of such item to any Dis-Interested Director or to a Member, with the consent of the Members present, and resume the Chair after that item of business has been transacted.

This consent may be ascertained by way of voting or poll.

At the end of this post, I want to mention that some provisions I criticised here may be taken from the Act or relevant Rules and in such case may be treated my suggestion for relevant changes the Act or these Rules.

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