BOARDROOM BEST PRACTICES

What Does a Company Secretary Do?

The role of company secretary is a diverse and challenging one. As scrutiny of governance and focus on regulatory compliance has increased in recent years in the wake of high-profile corporate scandals, company secretaries have found themselves playing a pivotal part in the push for stronger, more efficient governance processes and performance.

The role has always incorporated both administrative and advisory activities, but increasingly company secretaries are being asked to add more strategic value as they advise boards and company executives and support the shift to modern governance.

Many company secretaries are seizing this opportunity to spearhead improvements, increase their influence in the boardroom and build fulfilling and fascinating careers. So, what does a company secretary do, and how is this evolving as momentum gathers around modern governance?

Core Company Secretary Responsibilities

All UK public companies are required to have a company secretary and, while this has been optional for private companies since changes to the Companies Act 2006, they are generally well-advised to employ a company secretary. This is because of the essential and time-consuming nature of the core duties a company secretary must undertake, which are critical to the business and would otherwise devolve onto a senior director.

These include administrative tasks:

  • Maintaining statutory company records: this includes maintaining a register of past and present directors and secretaries, maintaining a register of shareholders, and keeping board and annual general meeting minutes.
  • Updating Companies House of any changes to company structure, directors or officers and completing annual returns such as auditors’ and directors’ reports plus financial statements.
  • Organising board and shareholder meetings: ensuring that proper notice is given; preparing the agenda in liaison with the board Chair; assembling and distributing meeting materials and taking accurate minutes of the meeting.
  • Communicating with shareholders and acting as the first point of contact for shareholder interaction.

And advisory functions:

  • Advising the board on relevant regulatory and compliance issues affecting its operations and monitoring the evolving landscape for changes to regulations that require action by the company and/or board.
  • Ensuring the company adheres to relevant corporate governance codes and governance best practices, including developing and implementing governance controls and processes.
  • Providing guidance for directors on the proper discharge of their duties to the organisation.
  • Supporting new directors through comprehensive on-boarding and familiarisation programmes.

Strategic Company Secretary Responsibilities and Relationships

It is clear from the list above (which is not exhaustive) that the company secretary role is highly diverse and those who undertake it need a broad skillset—from organisational skills required for detailed administrative tasks to the necessary confidence and authority to advise the company’s most senior directors.

Depending on the size of the organisation, the company secretary may lead a team of people, meaning excellent management skills are essential. Alternatively, in smaller organisations, the company secretary may fulfil all the tasks above themselves and be required to turn their hand to others as the need arises. Whatever the scenario, the company secretary needs to be resilient, efficient, and work with calm authority.

One of the most important strategic relationships for the company secretary is with the board chair. This needs to be a positive partnership that creates an effective liaison between the business and the board.

The company secretary supports the board to function as effectively as possible. This includes advising on the regulations and codes that the board must comply with and ensuring that the right level of consideration is given to key governance topics.

Another essential company secretary responsibility is ensuring that information flows easily and accurately between the board, its committees, non-executive directors and company executives. The right people need to get the right information at the right time to make fully informed decisions in the best interest of company stakeholders. In today’s information-rich world, businesses getting the balance right between the amount and quality of information shared with the board is essential. Too much and directors risk drowning in data, too little and they lack the visibility needed. Striking this balance is part of the company secretary’s role.

Technology is an essential aid to assembling vital information and sharing it securely with board directors, while also freeing up company secretary time and allowing more focus on higher-level advisory activities. Innovations such as board portal software have dramatically reduced the amount of time and resources needed to create board meeting materials. Such technology, which can also include secure director messaging systems and templates to expedite the drafting of agendas and the taking of meeting minutes, is an essential pillar of the drive to adopt modern governance.

Company Secretary Qualifications and Resources

Company secretaries often have a background in finance or law, particularly as membership of one of the professional finance bodies or holding legal qualifications is a stipulation for being a company secretary for a UK public company. However, it is not necessary for company secretaries of private companies to hold any specific qualifications or experience. This opens the profession to a wide range of entrants who can build fulfilling careers in the sector.

One thing that is clear about the company secretary role is that it is essential to keep up to date with developments in governance and regulations, as well as identifying and promoting best practice. Developing a peer network through which to share experience and seek advice is an essential activity for company secretaries. The primary body supporting governance in the UK is ICSA: The Chartered Governance Institute, which offers qualifications and professional development, a wealth of governance resources and a variety of professional services and job listings. In addition to this, there are knowledge hubs and best practice resources such as Diligent Insights, through which company secretaries can access the experiences of their peers.

Commentators on the sector are noting the shift in balance between administrative and advisory functions, with company secretaries focusing much more on how they support boards and senior management as governance advisors and increasingly being in a position to drive forward the modern governance agenda. Ultimately, what company secretaries do is becoming even more pivotal to the mission of the board.

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