Mandatory PoSH Disclosures in Directors’ Reports: MCA’s 2025 Amendment is a Wake-Up Call for India Inc

It started with a whisper.

An intern in a mid-sized Gurugram startup told her team lead she was being harassed by a senior employee.

The response?

“He’s old-school. Just ignore him.”

There was no Internal Committee (IC) orientation. No policy she could find. No one she felt safe telling.

She stayed quiet. Until the silence became heavier than the risk of speaking up.

When her story reached the company’s investor a few weeks later, the fallout was swift: legal calls. Reputation damage. Frantic attempts at PoSH compliance that should’ve existed from day one.

This isn’t an anomaly.
It’s a pattern—and regulators have finally called time on it.

🛑What Changed—and Why It Matters

In May 2025, the Ministry of Corporate Affairs (MCA) issued a quiet but powerful notification. One that pulls PoSH out of the shadows and into the core of corporate governance.

Until recently, the PoSH disclosure requirement in the Board’s Report was mandatory only for listed companies under Rule 8(5)(x) of the Companies (Accounts) Rules, 2014.

Unlisted companies—especially in India’s vast MSME and startup ecosystem—were exempt from publicly reporting their compliance. That legal gap enabled silence. 

Now, via the Companies (Accounts) Second Amendment Rules, 2025, every company in India [except One Person Companies (OPCs) and Small Companies]—must disclose in its Board Report (through the revised E-Form AOC-4):

• Number of sexual harassment complaints received during the financial year
• Number of complaints disposed off
• Number of cases pending for over 90 days
• Confirmation that an Internal Committee has been constituted as per law.

✅This isn’t a best practice anymore. It’s a baseline requirement.

🚨The Reality Check: What the Data Reveals

For years, PoSH compliance in India has been more about appearance than action:

• Policies lifted from templates, rarely contextualised
• ICs formed with no external members or legal training
• First responders unaware of escalation protocols

In 2022–23, an analysis of 300 NSE-listed companies revealed that while just 81 firms accounted for 1,160 complaints, 219 companies reported zero cases. 

Even more startling—14 of the top 100 companies never reported a single case since the PoSH Act came into force.

This suggests widespread under‑reporting—not because incidents were absent, but because systems often were.

A 2024 survey of 200 senior HR professionals reinforced this: 59% of companies hadn’t even constituted a legally compliant IC.

Together, these findings paint a troubling picture: most organisations were technically compliant—but in reality, no oversight, no documentation, and often no action.

By mandating public disclosure, the MCA is forcing a cultural shift: From silence to systems. From optics to outcomes.

🧾What This Means for You

Whether you’re a 10-person startup or a national manufacturing brand—this amendment applies to you.

Your Board Report must now confirm:

✅An IC has been constituted under Section 4 of the PoSH Act
✅The company has complied with all provisions of the PoSH Act
✅That complaints—if any—were addressed timely in a legal manner

But more than what’s on paper—it’s about what’s in practice. Questions every leadership team must now ask:

• Have we trained our IC and employees this year?
• Do our first responders know how to listen and act?
• Is our PoSH policy accessible, visible, and localised?
• Are we documenting redressals honestly?

This isn’t about ticking boxes.

It’s about protecting people.

💸The Cost of Evasion: Penalty with Teeth

Non-disclosure now comes with a price tag. Under Section 134(8) of the Companies Act, 2013, failure to make the above disclosures can now lead to a penalty of:

• INR 3,00,000 on the company; and
• INR 50,000 on every officer in default.

Startups, OPCs, and small companies are granted limited relief, but even there, the penalties remain significant —INR 1,50,000 for the company and INR 25,000 for each officer in default.

📌The message is clear: passive compliance is no longer enough.

The law demands accountability backed by action.

🪞A Mirror for Leadership: From Policy to Practice

The MCA’s amendment does more than update the law—it holds up a mirror.

A mirror that asks every Board, every leadership team:
Is your workplace merely compliant on paper, or genuinely safe in practice?

Because when safety is reduced to a checkbox:

• Culture cracks
• Trust fades
• People walk away
• And silence turns into liability

This is a moment to choose:

Responsibility over risk. Conscience over convenience.In 2025, the real question isn’t: Did we file the right report?
It’s whether that report reflects who you truly are—as a leader, and as an organisation.