BOARDROOM BEST PRACTICES

The Company Secretaries Role and the Board

Since the financial crisis, and with Brexit on the agenda, governance has become a ‘hot topic’. The Company Secretary is the guardian of governance for the organisation, and, as such, acts as its ‘conscience’. The company secretary role at UK companies has become that of governance expert, a reliable adviser to the board, as well as one who keeps it going efficiently and securely.

The Company Secretary is “Conscience of the Organisation”

Since the 2008 financial crisis and, more recently, Brexit, governance and regulation have become hot topics.

At most UK companies, the key person responsible for maintaining and updating the applicable compliance, and in advising the chairman on corporate governance, is the Company Secretary.

The Company Secretary interacts with the board on a daily basis and is responsible for communication with management. Through interaction with the board, the Company Secretary develops a full and direct understanding of the kind of corporate culture that the organisation wishes to achieve. This makes the Company Secretary the springboard for implementing a culture that values corporate governance throughout the organisation: The Company Secretary’s regular engagement with the rest of the business and shareholders shows how the role is uniquely placed for strategic direction.

“They are valued strategic advisers with in-depth knowledge of law, taxation, finance and management who give independent, impartial advice and support to directors, trustees and other key decision makers across the private, public and not-for-profit sectors. They support and advise the boards of organisations and ensure that the organisation they work for is complying with regulatory standards. In an increasingly regulated world, it goes without saying that this is no mean feat,” the Institute for Chartered Secretaries and Administrators says in a recent article.

All of these abilities must be brought to bear in managing the additional tasks of corporate board meeting minutes and organising annual meetings.

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The Company Secretary is a Governance Professional

It is because Company Secretaries are, first and foremost, governance professionals that they act as the “conscience” of the organisation.

“Company Secretaries have an important role to play as governance professionals in all types of organisations in the private, public, and not-for-profit sectors. Governance is more than just complying with laws, regulations, standards, and codes; it is also about creating cultures of good practice. This means that corporate secretaries need more than the technical skills and experience to know what corporate governance practices are needed in an organisation and why. They also need the emotional intelligence, skills, and experience to ensure that they know how the practices typically would be implemented to work effectively,” explains the in a report.

Company Secretaries and Corporate Governance

The Company Secretary role includes being active advisor, and one duty for the Company Secretary is to provide thought leadership in sensitive areas like governance, board independence, potential conflicts of interest on the board and oversight of committee activities.

Generally, every board committee will have a designated executive point person. Often, the CEO is the point person for the board, the chief financial officer is the point person for the audit committee, the chief human resources officer is the point person for the compensation committee, and the secretary is the point person for the nominating and governance committee. the executive liaison to the nominating and governance committee, according to one governance professionals organisation.

Board Meeting Minutes and Boardroom Meetings

Given the important level of advisorship in governance that the Company Secretary provides, one would think that taking the minutes is a menial task. It is anything but that!

The responsibility falls on the Company Secretaries role to record boardroom minutes in such a way that proves that board directors are meeting their fiduciary obligations. This means that the Company Secretary must have a profound understanding of what responsibilities the directors must fulfil, and be able to show in the minutes – which are a legal document – that the board members are taking the steps required of them. Documenting the board’s discussions will also show which directors are taking leadership and actively moving the company forward.

They will also show those directors, if any, who are not fulfilling their responsibilities, and this could be important as the chairman seeks to either bring them along or replace them.

Providing direction for the annual meeting is equally important, and a function of the thought leadership that a Company Secretary should provide. The selection of topics for the meeting, and arranging how they will be presented, could have a direct effect on the future of the organisation. It must be done with careful consideration and the deep knowledge of the company that only the Company Secretary may have.

The secretary may have either primary or shared responsibility for drafting the script and the agenda for the annual meeting and for helping directors and management prepare to respond to shareholder questions at the meeting by creating briefing materials on current or “hot-button” issues. The secretary may make last-minute changes to meeting arrangements based on the needs of the company.

Diligent’s company secretary software and minute taking software

It’s clear that Company Secretaries need support in their very demanding role. Governance Cloud is Diligent’s ecosystem of cloud-based governance tools that provide a complete solution to enable leading bodies of organisations to mitigate risk and govern collectively at the highest level.

Seasoned in the governance space, Diligent governance software has been in the leading position in the market for more than 15 years, offering the industry’s leading, most secure and most intuitive boardroom software. Our deep customer insights and heavy investment in R&D have allowed us to expand our offering to support the full governance journey.

Whether you choose to start with only Diligent Boards, or multiple, integrated tools, we are the only partner in the market you can grow with as your governance needs evolve.

Diligent Minutes is a core component of Governance Cloud, Diligent’s enterprise management ecosystem of software that allows for end-to-end governance management. Minute-taking is required in board meetings, but the process is usually manual, insecure or both. Diligent Minutes is a minute-taking and action item management solution built seamlessly into Diligent’s board management software.

Diligent Minutes provides an integrated solution that uses the meeting information already in Diligent Boards™ to make minute-taking easier than ever. Meeting dates, lists of attendees and agenda items are pulled into the minutes document automatically. Action items can be added with just a few clicks, and assigned and tracked during or after the meeting. When minutes are completed, they can be pulled right into your next Diligent Boards™ meeting book for discussion and approval by your board of directors.

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