The role of a corporate secretary: What do they do and do you need one?
If you’re seeking clarity on the corporate secretary’s function in a company, look no further. Responsible for board operations, legal compliance, and strategic guidance, a corporate secretary is a cornerstone of corporate infrastructure. This guide offers an insightful look into the role.
Overview:
The corporate secretary: A strategic gatekeeper
Operating from a strategic position, the company secretary helps the board of directors, and by extension, the company, navigate corporate governance.
The role of the company secretary includes:
- Advising directors
- Shaping company policies
- Managing the delicate balance between regulatory demands and strategic objectives
- Working closely with senior management and board members
- Gatekeeping governance issues
- Upholding the company’s standing in the eyes of external regulators and shareholders
In the corporate sector, an assistant company secretary is often part of an in-house legal team, working alongside company secretaries, and has influence and essential oversight.
Core responsibilities
Company secretaries are typically responsible for:
- Maintaining the company’s statutory books
- Safeguarding legal and administrative tasks that are the bedrock of corporate transparency
- Organising board meetings
- Drafting detailed agendas
- Crafting minutes
- Updating Companies House to reflect significant changes from director appointments to the company’s address
These tasks are critical to ensuring the company complies with notice requirements and the rhythm of corporate decision-making, as well as satisfying statutory requirements and keeping the company’s affairs current and above board.
In the realm of formal communications, the company secretary is the guardian of legitimacy, ensuring that the company’s website and stationery resonate with the correct legal information and that pivotal legal documents are kept secure.
Ensuring compliance
The company secretary is pivotal in steering the company towards compliance and preventing conflicts of interest, from ensuring the company’s conduct is in line with the Companies Act, to implementing policies that meet the company’s ethical standards.
The company secretaries’ domain has expanded, absorbing roles that once lay elsewhere, and emphasising the specialised skills required to manage the rigours of regulatory requirements and maintain statutory books.
Involvement in strategic decisions
When the board convenes, the company secretary is there to provide counsel that shapes the strategic decisions pivotal to the company’s course. As custodians of governance, company secretaries:
- Advice on statutory duties and compliance obligations
- Manage conflicts of interest
- Ensure that the board’s actions align with the highest standards of accountability and integrity.
They are the architects of processes that promote good governance and are entrusted with the responsibility to ensure that actions stemming from board evaluations are brought to fruition. It is under their watchful eye that:
- new legislation is monitored
- its implications are deciphered
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The evolution of company secretarial services
The company secretary’s role has undergone a metamorphosis; where it was one relegated to clerical tasks, it has now adopted a strategic advisory dimension.
Gone are the days when company secretaries were seen merely as scribes of the board; today, their duties encompass the design and implementation of processes that uphold and enhance the pillars of good corporate governance, ensuring that the company not only complies with corporate governance codes but also embodies them.
The advisory dimension of their work involves them in high-level board consultations on:
- directors’ statutory commitments
- regulatory disclosure obligations
- the overall governance practices and processes that envelop the organisation
As the primary conduit for external stakeholder inquiries, company secretaries stand at the helm, directing the flow of communication channels within the organisation.
From clerical to strategic
The transformation from purely administrative tasks to strategic advisory roles is a testament to the evolving nature of the company secretary’s position. No longer confined to the backrooms of board meetings, company secretaries now:
- Stand shoulder to shoulder with directors
- Advise directors on their duties
- Ensure that the company’s actions reflect the spirit and letter of corporate legislation and articles of association.
- The strategic essence of their role is further underscored by their partnership with the chairman, working in concert to cultivate an environment where the board can operate with efficiency and foresight.
The rise of specialised skills
The company secretary is cast in the role of the governance professional, a role that demands specialised skills and a profound understanding of the nuances of corporate governance.
Aspiring company secretaries can pursue professional development through the Chartered Secretaries Qualifying Scheme offered by the Chartered Governance Institute UK and Ireland.
Moreover, the path to becoming a company secretary is not set in stone; graduates with experience in law or accountancy can transition into the role, bringing a wealth of knowledge from other professional terrains to enrich the company secretarial role.
The distinction between public and private companies
Public and private companies demand different attributes from the company secretary.
Public companies are bound by company law to appoint a company secretary, tasked with ensuring compliance with stock exchange regulations and adherence to the rigorous standards of corporate governance codes.
In contrast, company secretaries in private companies navigate a more malleable environment, allowing the role to be adapted to fit the unique needs of the organisation.
Public company scrutiny
There is intense scrutiny on public companies, where the company secretary must ensure unwavering compliance with the mandates of stock exchanges and governance codes.
Whether managing the company’s registrars or overseeing systems that ensure adherence to all applicable codes, the company secretary is the guardian at the gate, protecting the company from the perils of non-compliance and the ensuing consequences such as fines.
Their role as advisors on financial issues and as orchestrators of board and shareholder meetings is pivotal, ensuring the handling of minute details like share register management and monitoring share ownership changes.
In the UK, the qualifications for becoming a company secretary in a public limited company are clearly defined by The Chartered Governance Institute UK and Ireland, ensuring that those who hold the position are equipped with the knowledge and skills necessary to uphold the company’s integrity and fulfil its statutory duties.
Flexibility in the private sector
In the private sector, the company secretary role depends on the organisation’s needs. Absent the legal requirement to appoint a company secretary, private companies have the latitude to adapt the role, making it as expansive or focused as they see fit.
However, this freedom does not absolve the directors of private companies from the mantle of statutory obligations, which they must shoulder in the absence of a designated company secretary.
Often, private companies choose to appoint the role, recognising the value of having a dedicated individual to oversee administrative tasks, thereby freeing the directors to focus onthe business.
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Qualifications and career pathways
The path to the role of a company secretary is paved with education and experience in fields as varied as business, law, accountancy, and public administration. Those with a flair for governance may find their way to this strategic position through alternative educational pathways such as foundation degrees, higher national diplomas, or business-related apprenticeships.
The journey is further enriched by experiences gained in areas like:
- pensions
- insurance
- personnel and specialist recruitment
- agencies
- office management
While the qualifications required may vary between public and private companies, with public entities often demanding professional qualifications, the role’s essence remains steadfast: to uphold the pillars of governance and guide the company with wisdom and foresight.
Entry-level to executive
The company secretary role is not static but dynamic, offering a trajectory that can take one from entry-level positions to the upper echelons of executive management. With experience and a commitment to continuous learning, company secretaries can ascend to roles such as head of department or director, or they may choose the path of freelance consulting, offering their expertise to a broader audience.
The pursuit of new skills is not just a requirement but a necessity for company secretaries, including trainee company secretaries, who seek to enhance their professional value and contribute to the effectiveness of the board they serve.
Professional bodies and certifications
For those who aspire to the company secretary role, professional bodies such as The Chartered Governance Institute UK and Ireland can guide them with their Chartered Governance Qualifying Programme.
This programme, with its foundation and advanced levels, is a comprehensive roadmap for aspiring company secretaries, imparting the knowledge of risk, strategy, and board dynamics essential for navigating the complexities of the role.
With the completion of the programme, individuals achieve GradCG status, a mark of their commitment and expertise, which can lead to Fellowship status for those with extensive experience. The Institute supports professional development through a plethora of resources, including:
- study materials
- webinars
- workshops
- seminars
- access to special interest groups
This ensures that group company secretaries remain at the forefront of governance excellence.
The boardroom liaison
Within the boardroom, the company secretary’s expertise ensures that board operations are not only compliant with relevant rules and regulations but also executed with a level of finesse that sets the standard for corporate governance.
The support they provide to the chairman is invaluable, helping to ensure that the board functions efficiently and effectively.
Preparing agendas and documenting minutes
During board meetings, company secretaries are charged with the preparation of agendas and documentation of minutes.
The agenda, crafted in collaboration with the board chair, serves as the script for the meeting, guiding discussions and ensuring that each item—from financial reports to new business—is addressed with due diligence.
The company secretary also keeps track of attendance, actions, and decisions, and ensures that the symphony of board deliberations is captured accurately in the minutes.
They also provide information to inform board discussions.
Facilitating communication
Company secretaries are in charge of ensuring seamless coordination between the board, committees, senior management, non-executive directors, and shareholders. Their role also includes engaging with investors and shareholders.
By managing the distribution of board materials and maintaining statutory books, they promote transparency and readiness. Their role as intermediaries includes:
- Liaising with external regulators and advisers, such as lawyers and auditors, to remain informed of legislative and regulatory changes
- Coordinating board meetings and ensuring all necessary documents are prepared and distributed
- Facilitating communication between board members and stakeholders
- Providing support and guidance to board members on governance best practices
This multifaceted nature of their work showcases the importance of their role in ensuring smooth and efficient governance processes.
Technology and company secretarial work
Company secretaries have embraced technology to help them in their work, such as:
- Inform Direct, to streamline statutory registers maintenance and manage company records with precision
- Directorpoint and OnBoard, board portals that have revolutionised company secretarial tasks by enabling paperless minute-taking and document management, facilitating the seamless transition to remote work models
- Board management and entity management software solutions such as Diligent Entities and Athennia, to handle legal entity management, maintain compliance, and manage commercial data.
- Cloud-based document management systems like iBabs and Decision Time Meetings providing an organised, accessible, and secure platform for document sharing and management, ensuring that all necessary reports and information are readily available for meetings
- Blockchain technology, offering secure record-keeping and shareholder information management.
Embracing digital transformation
The role of the company secretary is continuously evolving, shaped by technological advancements like AI and blockchain, which bring new implications for governance and record-keeping. Modern corporate secretaries are expected to not only understand but also embrace these advancements.
Solutions like Corporify and Athennian, alongside customizable governance platforms such as HETIKUS Boards & Committees, exemplify the digital transformation within the realm of company secretarial work, enhancing efficiency in legal entity management and board management tasks.
It is imperative for company secretaries to:
- Fully comprehend the functionalities of these new technologies
- Invest time in training to ensure their proficient use
- Harness them to support the company’s governance and strategic objectives.
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Summary
The role of the company secretary is far more strategic and impactful than one might initially perceive.
From the core responsibilities of maintaining statutory records and organising board meetings to ensuring compliance and advising on strategic decisions, the company secretary is a vital force in the governance and operational efficiency of both public and private companies.
Their evolution from clerks to strategic advisors, the specialised skills they embody, and their role as the boardroom liaison have all been shaped by the dynamic landscape of modern business.
Technology, too, has left its indelible mark, offering new tools and platforms to optimise workflow and meet the challenges of a digitally transforming world. In essence, the company secretary is a steward of corporate integrity, a role that continues to evolve and adapt, ensuring the company remains true to its course.
FAQs
The company secretary plays a crucial role in ensuring legal compliance, maintaining statutory registers, facilitating communication among stakeholders, and providing legal and strategic advice. Their responsibilities include overseeing administration, maintaining corporate records, and ensuring compliance with financial and legal requirements.
Yes, according to the Companies Act 2006, a company secretary is considered an ‘officer’ of the company, playing a crucial role in the management team.
The powers of a company secretary can vary depending on the company’s constitution, its articles of association, and the delegation of authority by the board of directors.
To become a company secretary, you’ll typically need 1 or 2 A levels, or their equivalent, for a higher national certificate or higher national diploma.
In the UK, it is possible for the CEO (Chief Executive Officer) to also hold the position of company secretary, but it’s not typically recommended for larger companies or those with complex operations. The role of the company secretary involves various legal and administrative responsibilities related to corporate governance, regulatory compliance, and board support, which may conflict with the strategic and operational focus of the CEO.
The role of the company secretary has evolved from administrative tasks to a strategic advisory position, encompassing broader responsibilities in governance, compliance, and advising directors on statutory commitments and regulatory disclosure obligations.
Yes, in the UK, your accountant can also serve as your company secretary. There are no legal restrictions preventing an accountant from holding the position of company secretary simultaneously.
Accountants typically have a good understanding of financial matters, regulatory requirements, and compliance issues, which can be beneficial in fulfilling the duties of a company secretary.
