Following the 2008 financial crisis, great emphasis is being placed on corporate governance by governments, organisations and companies worldwide. Emphasis is being placed on the role of the company’s officers and the manner in which the board should operate to ensure that the company upholds a solid corporate governance framework. Focus has, in certain cases, also shifted on the company secretary and the role this office can play in ensuring effective corporate governance.
Appointing a company secretary who is a professional will add value to the board
The company secretary should not be looked at as merely performing administrative secretarial duties. It is true that in most cases a company secretary must perform these duties and must ensure that established board procedures are followed, but nowadays the role of company secretary is being increasingly considered as that of a special advisor to the board.
The company secretary should ensure that there are proper communication channels between the board, management and the company’s service providers. Additionally, as the officer who has direct access to the board and vice versa, the company secretary should be the corporate governance expert on whom the chairman and board collectively rely for guidance on corporate matters.
The chairman of a board should also be able to rely on the company secretary.
This is the person to ensure that certain matters are included in the board agenda and that papers presented to the board are submitted in accordance with its requirements. At law, every company must have a company secretary and the person occupying this post need not have any specific qualifications.
It is the directors who appoint a company secretary. However, in practice, appointing a company secretary who is a professional will, in the long run, add value to the board – the company secretary will have the acumen to be able to focus the attention of the board to specific issues or raise matters which should not be overlooked by the directors.
Similarly, it is the company secretary who must ensure that before board meetings, directors receive information in a timely manner to allow them to contribute fully at such meetings, and to take informed decisions.
The company secretary should not only be viewed as the officer who takes minutes and files documents at the Registry of Companies. Directors should look on the company secretary as the link between the board and management and who can relay the value brought by the board to management. This is particularly the case with board committees, where the company secretary plays a role in ensuring that communication flows between the committees and the board and that the committees’ functions are performed.
A company secretary should act as first champion of corporate governance, seeking at all times to do what is right and persisting to ensure that all officers of the company follow suit.
ssciberras@ganadoadvocates.com
Stephanie Sciberras is a senior associate at Ganado Advocates.