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What is the Role of the Company Secretary?

The role of the company secretary is changing

There is still a ‘secretary’ aspect to the role of the company secretary, or chartered secretary, or not-for-profit secretary on UK boards, but that aspect of the work is no longer the most important part.

“The responsibilities of the modern day company secretary have evolved from that of a “note taker” at board meetings or “administrative servant of the board” to one which encompasses a much broader role of acting as “board advisor” and having responsibility for the organisation’s corporate governance,” comments Deloitte in a recent note.

“The board, particularly the chairman, relies on the company secretary to advise them not only on directors’ statutory duties under the law, disclosure obligations and listing rule requirements but also in respect of corporate governance requirements and practices and effective board processes. This specialised role of the modern company secretary has emerged to position them as one of the key governance professionals within the organisation.”

Board trustees depend on the secretary

In the UK and Northern Ireland, all public companies must have a company secretary, but private companies are not obliged to have one, under the latest revision of the Companies Act 2016. For not-for-profit organisations, it is good practice to have at least three trustees, usually consisting of: a chair, a secretary and a treasurer.

In Northern Ireland, however, all organisations must have a secretary.

While the role has become optional in two of the three geographies, one might view it as having lost importance – this, however, would be a grave mistake.

“The duties formerly held by the company secretary in organisations which have since chosen not to have one become the responsibility of the board, or sometimes that of the general counsel. This raises compliance issues, because the pressing responsibilities of those executives do not allow them to assure all of these extra burdens.

This is particularly true as good governance has become an increasing priority for most organisations.

The focus on good governance and compliance is only expected to grow sharper, warns the Institute for Chartered Secretaries and Administrators.

“Nor is this likely to dissipate in the coming years. Rather, it is likely to intensify as organisations battle to meet the increasing volume of regulation set out by government. With the volume of statutory changes we have seen in the last decade, and the pace at which new legislation is brought into force, it is unlikely that we will see any long period where obligations remain consistent.”

“Without a dedicated governance professional taking the helm and managing the governance affairs of companies, there is a real danger that companies will fail to meet their obligations and their directors will face personal sanctions.”

Regardless of any changes that do occur, it is clear that the responsibilities of the company secretary, named or not, continue to develop and increase. The practical case for having an effective company secretary guiding boards will not disappear anytime soon.

Company secretary must support directors’ fiduciary duties

Part of being an effective company secretary involves communication and knowledge-sharing.

The secretary of the corporation is an active conduit for communication between the board, management and external stakeholders. There will inevitably be disputes among all of these parties, and the company secretary has the difficult role of maintaining the discussions without allowing them to devolve into bitter arguments.

Rather, the secretary should mediate among all of these parties, and try to help them to find common ground. Because company secretaries must have a profound knowledge – both of the organisation itself, and of related events and trends – they can often provide details that will help settle disputes.

In the UK, the board of an organisation must work to fulfil its mission as set down in the organisation’s governing document. This means that the board, among its responsibilities, must plan what the organisation will do, and what it should achieve, and understand how the board makes a strategy to succeed in reaching these goals.

The company secretary must share this understanding, and work to keep the board on track. This can be difficult when new board members arrive – the company secretary should have onboarding materials ready and arrange conferences with other board members to get the new members on the same page.

Company secretary must manage board meetings

To ensure that board meetings are effective, the company secretary should make plans for board meetings well in advance, and have them approved by all directors. It is up to the secretary to make sure that materials needed for board meetings are up-to-date, and ensure that the programme of meetings allows for directors’ discussion – both formal and informal. The company secretary should discuss important matters with the directors in advance of the board meeting so that, during the meeting itself, they can concentrate on making decisions.

Company secretary must take the minutes expertly

Minutes that carefully reflect board meetings are a legal obligation in the UK. The company secretary should take care to include all relevant material, and especially all decisions, as well as a clear list of votes in each case. An electronic board portal makes taking the minutes easy and secure.

BoardEffect supports the secretary at not-for-profit organisations

Secretaries need the support of a high-quality board portal like BoardEffect – it has all the tools to make them efficient, including a minutes-taking tool from the Diligent Governance Cloud.

BoardEffect is collaborative software that makes collaboration at the board level easy and secure – we serve over 200,000 users worldwide, providing competitive pricing and exceptional value.

It allows not-for-profit boards of directors in sectors from developing nation funding to healthcare to work together wherever they are, and with whatever device they are using – it is user-friendly, so no extensive training is required.

The BoardEffect platform has been developed to be clear, intuitive and elegant. This is particularly important, as the high-profile audience who use BoardEffect usually have other jobs and commitments. Ease of use has become our “true north” – ensuring that our system can be used successfully by those with any level of technology experience and comfort. We back this up with 24/7/365 training and support for all users.

Communication among trustees is safe, and sensitive data stored on the portal is protected by the highest grade of encryption. They can securely access board books and other documents and collaborate with other users electronically. Collaboration can include discussions, surveys, electronic voting and more. The platform has unlimited storage that can be configured for each group to work privately.

BoardEffect ensures the highest level of security through a five-part security programme. We encrypt data in transit through Transport Layer Security (TLS) and at rest (AES-256), have secure SSAE16 audited SOC1 and SOC2 data centres with fail-overs, mirroring, third-party penetration testing and 99.99% facility uptime. We also have disaster recovery and business continuity plans, specialised compliance modules for healthcare, intrusion detection systems and much more.

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