Before You Sign: Why Every Director's POSH Declaration Is a Personal Liability This September 30

There is a single sentence in your company's Board's Report that most directors sign without a second thought. This year, that sentence could be the most personally consequential line you put your name to — and the deadline to get it right is September 30, 2026.

That is the date by which most companies (financial year ending 31 March) must hold their AGM, with the Board's Report approved and signed in the run-up to it. And that report now must contain a statement that your company has complied with the POSH Act. After the events of 2026, no director should sign that statement casually.

Here's why.

Part 1: The TCS Nashik case — when "we had a committee" stopped being a defence

At the TCS BPO campus in Nashik, multiple employees alleged sustained sexual harassment and coercion by team leaders, with the conduct reportedly spanning 2022 to 2026. A victim eventually resigned in March 2026, and FIRs followed.

The detail every director must absorb: the criminal net did not fall only on the alleged harassers. It reached a member of the POSH (Internal) Committee — the site head — whom the court found had ignored the complaints. In initially denying her bail, the court held that, despite sitting on the very body meant to protect employees, she had "demonstrated insensitivity to the oral complaints" and thereby "abetted" the continuing harassment. (She was granted bail in July 2026; proceedings continue.)

The lesson is brutally simple: an Internal Committee protects no one if it does nothing. Inaction is not neutral — in the court's eyes, looking away can amount to enabling the offence, and that exposure is personal and criminal.

This is exactly why who sits on your IC, and whether they are trained to act, matters more than whether the committee exists on paper. If your IC members can't confidently run a complaint from receipt to finding, they are a liability — not a shield. (For a practical framework, see our 7-Step Redressal Process Every IC Member Must Master.)

If a POSH Committee member can be arrested for inaction, ask yourself: what is the exposure of the directors who never verified that the Committee was properly constituted, trained, and functioning?

Part 2: The line you're about to sign — your Director's Report now speaks for you

While the Nashik case made headlines, a quieter change put the obligation squarely on directors' shoulders.

Under Rule 8(5)(x) of the Companies (Accounts) Rules, 2014, the Board's (Directors') Report must contain a statement that the company has complied with the provisions relating to the constitution of the Internal Committee under the POSH Act, 2013.

Many treated this as a listed-company concern. Not anymore. The MCA's 2025 amendment extended this disclosure obligation to most Indian companies — private companies included. In practical terms:

• Your Board's Report must affirmatively state POSH compliance.

• That statement is signed by the directors.

• A false or missing statement attracts penalties under Section 134(8) of the Companies Act, 2013 — including a fine on every officer in default (reported at ₹50,000 per officer, alongside company-level consequences).

  
  

Read together, the message is stark: every director must now personally put their name to a POSH-compliance declaration — by September 30. You cannot sign that honestly unless you know your IC exists, is correctly composed, includes the mandatory external member, is trained, and is actually handling complaints.

Signing it without knowing is a risk. Signing it falsely is worse. (Not sure your committee meets the legal test? Start with our IC Constitution & Composition Checklist.)

Three exposures converging on one signature

Directors now face risk from three directions at once:

1. Criminal exposure — as Nashik shows, individuals tied to a dysfunctional POSH process can be personally prosecuted for abetment.

2. Corporate-law exposure — a defective or false Director's Report triggers Section 134(8) penalties on officers in default.

3. Reputational and litigation exposure — a single mishandled complaint becomes a public case, an investor due-diligence red flag, and a damages or wrongful-termination claim.

   
   

None of these can be delegated away with a one-line policy. They require a functioning system — and proof of it.

Your pre-September 30 checklist — treat this as personal, not HR

1. Confirm the Internal Committee is validly constituted — correct size, a woman Presiding Officer, and the mandatory external member. A committee missing the external member is not validly constituted.

2. Verify the IC is trained and active — that members know how to receive, inquire into, and document complaints within statutory timelines. (See our IC Member Training Guide.)

3. Check the complaint record — are complaints, including oral ones, being logged and acted on? Nashik turned on ignored oral complaints.

4. Ensure the annual IC report is filed with the employer and the District Officer, and that your policy, awareness sessions, and register are current.

5. Demand documentary proof before you sign the Board's Report — don't certify compliance you haven't verified.

6. Commission an independent POSH audit if you're unsure. It is far cheaper than a criminal case or a penalty order. (Learn what an audit covers in our Annual POSH Compliance & Audit Guide.)

   
   

The bottom line

The comfortable assumption — "we have a committee, so we're covered" — is precisely what failed in Nashik. POSH compliance is no longer about having a policy; it is about being able to prove the system works, and now about being willing to sign your name to that proof by September 30.

For directors, the question has changed from "Is HR handling this?" to "Am I personally exposed if they aren't?" In 2026, the honest answer is yes — and the clock runs out on September 30, 2026.

Don't wait for a complaint, a notice, or a headline. Verify your POSH framework now — while it's still a compliance exercise and not a courtroom one.

Explore practical guides, checklists, and case analyses to build a defensible POSH framework: POSH Expert Solutions — Blog & Resources.