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The important role of company secretary: Changing times?

28/2/2019

1 Comment

 
The company secretary, a role defined in law in most jurisdictions, is an important actor in company boardrooms; a servant of the board with a mandate to ensure the smooth running of the board and its activities. Specific tasks include supporting the chair and chief executive in assembling board documentation; ensuring effective communications between key actors and external parties; recording and publishing minutes of meetings; and providing process support to the board as and when needed. Such a role seems clear.
But in recent times, company secretaries have assumed greater roles including speaking at meetings; exerting influence over decision-making processes, even to the point of presenting papers; and speaking for the board in the market square. This has been encouraged by associations representing company secretaries with the term 'governance professional'. Times are changing, for sure, but are these developments sound? Most of the contributions listed here come dangerously close to the secretary acting, or being seen to act, as a director. 
But the company secretary is not a director.
Rightly understood, the role of board secretary should—indeed must—remain one of servant to the board, not part of the board. If governance is a profession (a debatable point, given almost anyone can be a director and professional standards are not enforced), then it is directors not secretaries who are the rightful claimants of the title 'governance professional'. Some other questions boards may wish to consider are:
  • ​The company secretary's modus operandi needs to founded on service, discretion and trust, not power. Is this reasonable, or do you disagree? 
  • How does your board secretary actually operate? How should they?​​
1 Comment
Dr Steven Austen link
7/3/2019 10:49:55

I would agree that the company secretary is a servant of the board. The professional company secretary is quite often the primary source of governance expertise available to a board.

The matter of power can be seductive for some. However, experience shows that one can influence effectively through servant leadership. Trust is built with a board by the company secretary acting as an enabler, as opposed to a usurper of the board.

Given that many of the duties and responsibilities apply to both directors and officers (the company secretary being one of the latter) one can understand why sometimes the company secretary is seen to be operating beyond their brief; notwithstanding, it may well be risk mitigation re: their personal liability.

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