Definitions

Company secretary

Company secretary

A Company Secretary is a senior position in a private company or public organisation, normally in the form of a managerial position or above. In the United States it is known as a Corporate Secretary.

Despite the name, the role is not a clerical or secretarial one in the usual sense. The Company Secretary ensures that an organisation complies with relevant legislation and regulation, and keeps board members informed of their legal responsibilities. Company Secretaries are the company’s named representative on legal documents, and it is their responsibility to ensure that the company and its directors operate within the law. It is also their responsibility to register and communicate with shareholders, to ensure that dividends are paid and to maintain company records, such as lists of directors and shareholders, and annual accounts.

In many countries, private companies have traditionally been required by law to appoint one person as a company secretary, and this person will also usually be a senior board member.

Roles & Responsibilities

Company Secretaries in all sectors have high level responsibilities including governance structures and mechanisms, corporate conduct within an organisation's regulatory environment, board, shareholder and trustee meetings, compliance with legal, regulatory and listing requirements, the training and induction of non-executives and trustees, contact with regulatory and external bodies, reports and circulars to shareholders/trustees, management of employee benefits such as pensions and employee share schemes, insurance administration and organisation, the negotiation of contracts, risk management, property administration and organisation and the interpretation of financial accounts.

Company Secretaries are the primary source of advice on the conduct of business and this can span everything from legal advice on conflicts of interest, through accounting advice on financial reports, to the development of strategy and corporate planning.

Among public companies in North America, providing advice on corporate governance issues is an increasingly important role for corporate secretaries. Many shareholders, particularly institutional investors, view sound corporate governance as essential to board and company performance. They are quite vocal in encouraging boards to perform frequent corporate governance reviews and to issue written statements of corporate governance principles. The Corporate Secretary is usually the executive to assist directors in these efforts, providing information on the practices of other companies, and helping the board to tailor corporate governance principles and practices to fit the board's needs and expectations of investors. In some companies, the role of the Secretary as corporate governance adviser has been formalized, with a title such as Chief Governance Officer added to their existing title.

In view of the important roles the Company Secretary plays in business, PLCs and large companies require the Company Secretary to be suitably trained, and professionally qualified for these responsibilities.

The Company Secretary may be qualified by virtue of examination and membership (ACIS, or FCIS of the Institute of Chartered Secretaries and Administrators (ICSA), which is the only qualification specifically for Company Secretaries. ICSA is the only body dedicated to the advancement and recognition of professional administration based on a combination of degree-level studies, carefully vetted experience and sponsorship by two people of professional status. Only a person thus qualified is entitled to be designated a 'Chartered Secretary or Chartered Company Secretary'.

Chartered Secretaries are employed as chairs, chief executives and non-executive directors, as well as executives and company secretaries. Some Chartered Secretaries are also known in their own companies as Corporate Secretarial Executives/Managers or Corporate Secretarial Directors.

There is a special rule about company secretary in the UK http://companieshouseonline.com/content/view/46/54/1/4/ . Despite differences in the name of the organisations - it is the same for all publicly traded companies. The secretary (or each joint secretary) of a public limited company must also be a person who appears to the directors to have the necessary knowledge and ability to fulfil the functions and who:

  • held the office of secretary or assistant or deputy secretary on 22 December 1980; or
  • for at least three of the five years before their appointment, held the office of secretary of a non-private company; or is a barrister, advocate or solicitor called or admitted in any part of the United Kingdom; or
  • is a person who, by virtue of his or her previous experience or membership of another body, appears to the directors to be capable of discharging the functions of secretary; or
  • is a member of any of the following bodies:
    1. the Institute of Chartered Accountants in England and Wales;
    2. the Institute of Chartered Accountants of Scotland;
    3. the Institute of Chartered Accountants in Ireland;
    4. the Institute of Chartered Secretaries and Administrators;
    5. the Chartered Association of Certified Accountants;
    6. the Chartered Institute of Management Accountants (formally known as the Institute of Cost and Management Accountants); or
    7. the Chartered Institute of Public Finance and Accountancy.

Many Corporate Secretaries of North American public companies are lawyers and some serve as their corporation's General Counsel. But while a legal background is quite helpful in performing the role of Corporate Secretary, it is not essential. In fact, at times, having a Corporate Secretary who also provides legal advice creates interesting questions as to whether particular communications made to management are legal advice - which may be subject to the attorney-client privilege - or general corporate/business advice, which is not. Thus, the "dual hat" Corporate Secretary/lawyer must always be careful to distinguish (and, as Corporate Secretary, record) which "hat" is being worn, and whether it is legal or managerial advice that is being given to directors and management.

References

See also

Professional organisations

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