Secretarial audits are designed to reflect a company’s compliance with laws and regulations. In many PSUs, however, recurring qualifications — particularly around Board composition, committee constitution, or filing delays — have become predictable. In listed private companies, such qualifications are typically treated as urgent Board-level matters because they signal governance weakness to investors.

When qualifications appear year after year, they risk being treated as routine formalities, rather than signals of governance gaps. While these often stem from procedural delays, ignoring them can normalize non-compliance and erode stakeholder confidence. In PSUs, repeated qualifications sometimes become normalised — almost routine disclosures rather than red flags.

The issue is not that PSUs wilfully ignore compliance. The issue is that structural constraints and diffused accountability can dilute urgency. 

Boards in PSUs should approach recurring audit observations as opportunities for systemic improvement, not just annual reporting requirements. Each qualification is a mirror reflecting whether governance is truly embedded in the entity or merely procedural.

The 5th Annual Corporate Governance Survey, covering the Maharatna and the Navratna companies, brought out by Excellence Enablers Private Limited, indicated that 95% and 97% of the companies had non-compliances indicated in their Secretarial Audit and Secretarial Compliance reports respectively. 

Explore corporate governance practices being followed by Maharatna and Navratna companies in our 5th Edition of Corporate Governance Survey.

Mahima Chopra