Recently, the Registrar of Companies (RoC), Karnataka took regulatory action against a public limited company. The reason: failing to confirm compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 in their Board of Directors’ report.
This omission occurred over two financial years and resulted in monetary penalties not only for the company, but also for its senior leadership. The penalties were are follows:
- The company was fined ₹3,00,000, and
- Senior officers (including the Managing Director, CFO and Company Secretary) were personally fined ₹50,000 each for every year of non-compliance.
For companies, this is a timely reminder. POSH compliance does not end with policies, training or handling complaints, but also extends to formal corporate disclosures.
Why this is a requirement
Companies have a dual legal obligation under the PoSH Act, 2013 and The Companies Act, 2013 and Companies (Accounts) Rules, 2014.
The POSH Act puts the responsibility on employers to ensure that workplaces are safe, respectful and prepared to deal with sexual harassment proactively.
That is why this law requires organisations with 10 or more employees to:
- Set up an Internal Committee (IC)
- Ensure the committee is functional
- Take preventive steps like awareness and training
The Companies Act, 2013 and Companies (Accounts) Rules, 2014 adds another layer by requiring boards to confirm their company’s compliance with the PoSH Act publicly in their annual reports. This pushes accountability upwards, from HR to leadership, and ensures that workplace safety is treated as a governance issue.
Next steps for organisations
For organisations reviewing their PoSH readiness, this is a good moment to pause and check a few basics.
- Applicability: Confirm whether PoSH applies to your workplace. If your organisation has 10 or more employees at any location, it does. If it doesn’t apply to your company or certain sister entities/locations, that exemption should still be clearly stated in the Board Resolution.
- IC details: Ensure that the Internal Committee is properly constituted and active. An outdated committee, missing external member, or lack of records can create risk even if no complaints have been received. Internal Committee details must also be present in your Board Resolution.
- Documentation: Simple records of IC formation, IC meeting minutes, employee training attendance records, help ensure accurate reporting and reduce last-minute compliance gaps.
- Final checks: HR should work closely with legal and company secretarial teams during the annual reporting cycle. A quick review of draft Board Reports to ensure all details are recorded can prevent costly oversights and ensure that PoSH compliance is watertight.
This regulatory action reflects a broader shift in how workplace safety is viewed. PoSH is no longer seen as a standalone HR policy, it is increasingly treated as part of ethical leadership and good governance.
When boards confirm PoSH compliance in their reports, they signal that:
- Employee safety matters
- Systems are in place to address concerns
- Leadership takes responsibility for workplace culture
For organisations, this visibility builds trust both internally and externally.
Serein supports companies across India to integrate all necessary compliance requirements under PoSH so that you are never under any auditing risk. Reach out to us at hello@serein.in.