The Role of the Company Secretary

In today’s complex business landscape, the role of the company secretary has become increasingly vital. Far from being mere administrative functionaries, these professionals are now recognised as key players.

The role is crucial because it serves as the backbone of good governance, ensuring both legal compliance and effective board operations while protecting stakeholder interests. The company secretary therefore seeks to ensure corporate prosperity, as well as compliance.

Companies Act 2006 Part 12 s 270 and s 271

Section 270: A private company is not required to have secretary: A private company is not required to have a secretary. In the case of a private company without a secretary, anything that would be sent to or served on the company via a company secretary may be given to the company itself, and anything addressed to the company secretary will be treated as addressed to the company. Anything else required or authorised to be done by the company secretary may be done by a director or someone authorised to do so by the directors.

Section 271: Public company is required to have secretary: A public company must have a secretary.

Key points on the role of company secretary

Under the Companies Act 2006, the position of company secretary is mandatory for public companies, and any that propose to be registered as public companies (s 271). However, the position remains optional for private companies (s 270(1)). This distinction underscores the growing importance of the role, especially in larger, more complex organisations.

Company secretaries are officers of the company, alongside directors, and possess the authority to bind the company, albeit in a limited capacity. Their appointment and removal are matters of significant importance, requiring the full board’s consent.

For public companies, the role often requires advanced qualifications, with many secretaries being qualified lawyers, solicitors or barristers. The Chartered Governance Institute UK & Ireland describes the position as a ‘strategic position of considerable influence at the heart of governance operations’.

The role of a company secretary is multifaceted and critical to the smooth functioning of an organisation. Although their primary responsibilities encompass governance and compliance, ensuring that the company adheres to statutory regulations and follows its internal governance policies, company secretaries provide essential support to the board of directors, guiding them on their duties and responsibilities while ensuring that the board operates efficiently.

Another key aspect of the company secretary’s role is managing the flow of information between the board, management and shareholders to ensure clear and effective communication. Additionally, they stay informed about relevant legislation and regulatory changes, helping the company to remain compliant with all legal requirements. Their administrative oversight includes maintaining statutory records, organising key meetings and handling important corporate documentation.

Furthermore, beyond administrative duties, the company secretary often plays a strategic role by:

• participating in business strategy formulation;
• contributing to policy development and implementation;
• managing relationships with non-executive directors; and
• overseeing shareholder communications.

Therefore, the scope of a company secretary’s role can vary significantly based on the company’s size and nature. For example, in smaller firms, they might also handle finance or HR responsibilities. In larger corporations, their focus may be more specialised, concentrating on governance and compliance.

What does a company secretary do?

The specific responsibilities of a company secretary vary depending upon the level of the job role, the size of the organisation and the sector in which it operates. However, responsibilities typically include:

• guiding the chair and board on their responsibilities under the rules and regulations to which they are subject and on how those responsibilities should be discharged;
• supporting the chair in ensuring the board functions efficiently and effectively;
• ensuring good information flows within the board and its committees and between senior management and non-executive directors, as well as facilitating induction and assisting with professional development as required;
• maintaining good shareholder relations and keeping the board informed on shareholders’ views;
• developing and overseeing the systems that ensure that the company complies with all applicable codes, in addition to its legal and statutory requirements;
• monitoring changes in relevant legislation and the regulatory environment and taking action accordingly;
• overseeing the day-to-day administration of the company, e.g. maintaining statutory books, including registers of members, directors and secretaries, organising board meetings and AGMs, preparing agendas and taking minutes; and
• having responsibility for facilities, HR, insurance, investor relations, pension administration, premises and share registration (this only applies to some company secretaries).

Chartered Governance Institute UK & Ireland

In summary, the role of company secretary has evolved into an indispensable position at the heart of corporate governance. Whether adapting to the needs of a small, dynamic start up or navigating the complex regulatory landscape of a large corporation, the company secretary provides crucial expertise and strategic insight. Their ability to ensure compliance, facilitate effective governance and contribute to overall corporate success has cemented their position as key players in the modern business world.

As companies continue to face new challenges and increasing scrutiny, the role of the company secretary is likely to become even more vital, continuing its evolution as a central pillar of corporate leadership and governance.

 

Author bio

Muhammad Bilal (MBA, MCMI) is an accounting and finance professional with over two decades of experience, working as a Senior Consultant with M B Dean Accountants.