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PROFESSIONAL DEVELOPMENT International student column


Keeping good company John Harper on the role of the company secretary


A


bout 30 years ago I served for a time on the national council of the Institute of Chartered Secretaries and Administrators (ICSA). I can well recall a long


debate in which we were considering changing the name of the institute, and consequently the job description, to more closely fi t the work that our members performed. Some people certainly felt that outsiders assumed that we were experts at typing, shorthand and fi ling, apart from being decorative additions to the offi ce. In retrospect, we were actually in very good company. The UN Secretary General, the US Secretary of State and the UK Foreign Secretary presumably have no such identity crises. In fact, the word secretary comes from both the Middle English secretarie and the Latin secretarius, meaning one trusted with private or secret matters – so nothing to be too ashamed of there. In the context of a company


offi cer, however, things have changed considerably over the years. In the case of Barnett, Hoares & Co v South London Tramways Co (1887) the judge said: ‘A secretary is a mere servant. His position is that he is to do what he is told. No person should assume that he has any authority to represent the company in anything at all.’ How times have changed. Secretaries are now offi cers (CAO) of the company and can bind the company as against third parties who may assume they have the power. Unlike directors, whose powers are normally spelt out in the articles and in statute, the company secretary usually takes their powers as they may be delegated to them by the board of directors. Their role is well expressed on the ICSA website as follows: ‘Chartered Secretaries are high-ranking professionals with a broad base of skills unique among the professions. Trained in law, fi nance, accounting, strategy and


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named representative on legal documents, and it is their responsibility to ensure that the company and its directors operate within the law. It is they who communicate with shareholders to ensure that dividends are paid and to maintain company records, such as lists of directors and shareholders, and annual accounts. Company secretaries in all sectors


corporate governance, Chartered Secretaries provide a focal point for independent advice and guidance on the conduct of business, governance and compliance. They are key players with the skills, vision and values to take their organisations and clients forward.’ So, far from being a mere clerk, the company secretary performs a vital role in the business of running a company. Typical duties include being responsible for all corporate records, share certifi cates and register, executing documents, governance, arranging AGMs, submitting returns, taking minutes, dividend payments and being at the right hand of directors. Indeed, a company secretary may even be a director as well. Like a director, they have fi duciary and common-law duties to the company and can be liable just as much as a director, for instance if they are aware of insolvent trading or if they off end the confl ict of interest rules. 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 often the company’s


have high-level responsibilities, including governance structures and mechanisms, corporate conduct in 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 or trustees, management of employee benefi ts 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 fi nancial accounts. Company secretaries are the primary source of advice on the conduct of business, and this can span everything from legal advice on confl icts of interest to accounting advice on fi nancial reports, the development of strategy and corporate planning.


Since 6 April 2008 there has been no requirement for a private company in the UK to have a company secretary unless the company’s articles of association state otherwise. If a private company doesn’t have a company secretary, then the duties that would otherwise have belonged to the company secretary will fall on the directors of the company. A public company in the UK must still have a formally appointed company secretary. In summary, with a job description as wide as that, one wonders how a company can actually manage without one!


APRIL 2013 27


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