Company secretaries vary enormously between organisations. Some fall into the role unexpectedly, often with little to no training and without a clear sense of what’s required. Others are highly experienced professionals, skilled at navigating the nuances of the boardroom.
There is night and day between a company secretary who is limited to taking notes, lodging forms and scheduling meetings, and one who is equipped to be a valued adviser.
Maturing from the former to the latter is tough, but it’s not impossible. There are steps organisations can take to set up their company secretary to deliver a genuine impact.
Download For Free: 2020 Foresight – The year ahead in corporate governance
Why it pays to have a strategic governance expert
Corporate governance in Australia is at a turning point. Organisations across the private and public sectors are on a mission to rebuild trust while adjusting to a new landscape of increased scrutiny from regulators and the community.
Directors have their work cut out for them. Board agendas are expanding to reflect growing responsibilities around culture, non-financial risk, stakeholder engagement and digital transformation.
Management faces a balancing act to meet the board’s heightened needs while maintaining their own momentum. Producing insightful reporting competes for time with running the business and considering future challenges.
The pace of activity across board and management teams is increasing, and company secretaries are running faster than ever. But are they leading the pack or racing to keep up? Training for the long haul is vital to avoid burning out along the way. Without this vital partner beside them, directors and executives can find the changing terrain a struggle.
Know what high performance looks like
The best company secretaries seamlessly manage ongoing compliance and administrative matters. Meeting this expectation is a key prerequisite to demonstrating broader value to the board and the business.
The nature of that value can be as varied as company secretaries themselves. It will depend on their skills and experience, the size and type of the organisation and the maturity of its governance framework.
Strategic company secretaries go beyond processes to enhance governance across the organisation.
- Deliver insight – Observing board and committee meetings, holding regular conversations with directors, and having visibility across the organisation gives company secretaries a unique ability to convey directors’ perspectives and expectations.
- Forge connections – Having knowledge that spans every area of the organisation means company secretaries are ideally placed to create links between individuals and functions. This contributes to more effective risk management, stronger engagement and better board reporting.
- Thought leadership – Understanding new corporate governance developments, trends and issues enables company secretaries to provide strategic advice tailored to their individual organisation. Sharing this information establishes common ground in the boardroom and helps management anticipate directors’ needs.
Give them the authority to deliver results
Effective company secretaries develop deep and broad relationships across all levels of the organisation and build close connections to what’s happening in the business. But while their influence can be far-reaching, having authority still matters.
Company secretaries who are also the CFO or general counsel are members of the executive team as a matter of course. But greater focus often comes with less seniority, with separate company secretaries frequently reporting to the C-suite rather than being part of it.
The two critical relationships for a company secretary are with the CEO and the chair of the board. The further away they are from those roles, the harder it becomes to establish and maintain those relationships, even if a ‘dotted line’ exists. Managing a threefold dynamic is already challenging – adding another executive and an additional layer of hierarchy makes it significantly harder.
Structuring the company secretary role as part of the executive team, reporting directly to the CEO, also offers other benefits:
- Signals the importance of corporate governance to the organisation.
- Makes governance part of the conversation about significant issues.
- Supports timely sharing of information and helps break silos.
- Matches accountability with seniority so they can get things done.
Encouraging company secretaries to regularly meet with non-executive directors further strengthens the bridge between boards and management. These discussions provide valuable perspectives beyond the boardroom and support a proactive focus on key corporate governance issues.
Invest in resources to support efficiency
Capacity is a major barrier for many company secretaries in adopting a more strategic approach.
It’s hard to elevate your thinking when the minutiae of corporate compliance and administration are continually dragging you back to earth.
A constant stream of ongoing logistical activities is part and parcel of company secretaries’ responsibilities. These are important because of the people they involve and the governance processes they support – but they’re also a major distraction from more substantive work.
Something as innocuous as scheduling a meeting involves coordinating half a dozen non-executive directors who have multiple other boards, full calendars, no personal assistants and are located across a range of time zones. That’s before factoring in the management attendees.
Even the most capable and organised company secretaries can struggle to get out from under the continuous cycle to implement processes that will save time and energy over the longer term. Making sure they have the resources they need to succeed benefits the whole organisation, and directors and executives most of all.
Both people and systems are important to build a sustainable corporate governance function. They provide the power to establish and maintain consistent processes, develop internal controls, and tailor best practice to the organisation’s needs.
Make corporate governance a genuine team effort
Embedding a strong corporate governance culture and framework takes an organisation-wide approach. It’s too big for any one individual to achieve alone, however capable and well-supported they are.
Good governance needs to start with the board, through the values it demonstrates in its own behaviour. The CEO and senior executives play a vital role in making governance visible and valued across the business. They can show how it goes far beyond the boardroom and help extend it across every layer of the organisation, creating greater awareness and understanding.
The modern company secretary is no longer a fly on the boardroom wall, but a valuable butterfly. Directors and CEOs can help them to thrive and deliver the best possible outcomes for the organisation.
Diligent has been designed specifically to help organisations develop effective corporate governance frameworks. To find out how we can help your secretariat and board work better together, contact us at email@example.com or request a demonstration.
- The Evolution of Governance Reporting for Company Secretaries
- The Company Secretary’s Guide to Modern Governance
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