Managing Agency System: The Predecessor of the Company Secretary Profession

Abstract

The profession of company secretaries has evolved from the managing agency system. Managing agency is the vesting of the management of a joint stock company in the hands of a firm of professional managers. The managing agency was responsible for the initial promotion, financing, underwriting, and organization of the joint stock companies. The system was an indigenous response to the threefold shortage of entrepreneurship, capital and technical knowledge. However, later on the system degenerated into a device for the concentration of economic power and the exploitation of stockholders and therefore was abolished on 3rd April 1970. The abolition paved the way for the development of alternative systems of management to fill up the void. Further, it also facilitated the development of a professional class of managers who get the necessary training and qualification to manage the affairs of the companies once managed by the managing agents.