The role of the Company Secretary has evolved from that of a note-taker at board meetings and an administrative servant of the board to an essential figure in an organisation’s corporate governance.
Do all companies in the UK have to appoint a Company Secretary?
The short answer is no. Under the Companies Act 2006, it is mandatory for Public Limited Companies (PLCs) in the UK to have a Company Secretary at all times with the appropriate qualifications to fulfil the role. This could be any one or more of the following:
- Be a member of any of the following bodies; the Institute of Chartered Accountants in England and Wales; the Institute of Chartered Accountants of Scotland; Association of Chartered Certified Accountants; the Institute of Chartered Accountants in Ireland; the Institute of Chartered Secretaries and Administrators; the Chartered Institute of Management Accountants, or the Chartered Institute of Public Finance and Accounting
- Have held the office of company secretary of a public company for at least 3 out of the 5 years immediately before their appointment as secretary
- Be a barrister, advocate or solicitor called or admitted in any part of the UK
- Be a person who by virtue of their holding or having held any other position or their being a member of any other body, appears to the directors to be capable of discharging the functions of the secretary of the company. (Companies Act 2006, s.273)
Private Limited Companies on the other hand are not legally required to employ a Co-Sec, unless their articles of association state otherwise. If they do choose to appoint one, the secretary does not need any formal qualifications, but they must be suitably competent, confident and knowledgeable in the role. In some instances the Co-Sec may also hold a Director function. The failure of a private company Co-Sec to effectively carry out their duties ultimately falls with the directors of the company, who can be held personally accountable for their actions.
So, what does a Company Secretary do?
Today, Company Secretaries need a broad set of skills to meet the demands of the role. They act in an advisory capacity, guiding the board on corporate law, governance, strategy and corporate secretarial practice. For this reason they are often seen as the guardian of the company’s compliance with both the law and best practice. They also provide support to the Chair and Non-Executive Directors and assist the CEO, who they directly report to.
We caught up with Tracey Brady, a Company Secretary at KPMG during one of our NED Community meet-ups, to learn more about some of the core tasks performed by a Co-Sec.
Company compliance
The Company Secretary is responsible for ensuring an organisation operates within all legal and statutory regulations. This includes developing and overseeing systems that ensure a company complies with all applicable codes, filing of the confirmation statement and accounts with Companies House and maintaining statutory company records and registers, including a PSC register.
An effective Co-Sec must ensure they keep up-to-date with the latest legislation and any regulatory changes that could affect the organisation. “You don’t want to wait until the last minute for a new piece of compliance to come into force,“ says Brady. “There is certainly a lot around the Economic Crime Bill at the moment, which has just received Royal assent. Those are the types of things that the Co-Sec would be flagging to the board, making sure that everything is in place and in time for that deadline,” she adds.
Company Secretaries also play a critical role in major transactions. “A Company Secretary really comes into their own during a transaction”, says Brady who has worked in many of these scenarios over her 25 year career. Brady shared an example of a large company that needed to be split upon stock exchange listing, resulting in two companies being listed in the same time-frame – one as a FTSE 250 and the other as an AIM company. “We had a huge task to get the two companies split and get them, what I call PLC ready”, she recalls.
“It’s knowing what needs to happen during the transaction but also after a transaction,” she says, explaining that there is always a big focus on completing an IPO and then the team relaxes not realising that the company is now listed with a huge amount of obligations. “I always like to say that the advisors run off into the sunset very happy with their transaction and the Co-Sec is left still trying to manage everything,” jokes Brady.
Keeping records
Company Secretaries must maintain precise and up-to-date company records. They are responsible for share registers, annual returns, handling documents to ensure the company complies with GDPR and other regulations and filing/ retaining documents in a secure and efficient way. In addition to this, Co-Secs are required to take detailed minutes of both internal and external meetings, which Brady describes as an art and not a science. “It’s as much about what you don’t include as what you do,” she says. “The minutes are the record of the meeting. When I teach minuting, I ask people will your minutes stand up in 10 years time if there is a court case? That’s what I think about when I sit down to write the minutes,” she adds.
Maintaining key relationships
Part of the Company Secretary role is to maintain good shareholder relations whilst keeping the board informed on shareholders’ views. They will distribute company announcements including information regarding dividends, registration of share ownership, transfers and other areas relating to shareholdings. “Shareholder relations is a really important area and I don’t think you would necessarily expect it to be something that the Company Secretary is involved in,” says Brady. In fact, the Company Secretary is often the initial point of contact for a company. “Particularly in Listed Companies, shareholders will have an email or a number to contact the Company Secretary directly and that’s very normal”, she adds.
Organising meetings
“The boardroom is the Co-Sec’s arena”, smiles Brady. “We take responsibility for what we call the board cycle. Broadly speaking, the cycle never ends for us. As soon as one board meeting finishes, the cycle continues and we are into the next one,” she adds. The Company Secretary will manage different aspects of this board cycle including the logistics of the meeting – making sure that the right people turn up on time, ensuring that the papers contain accurate information, are in the right order and are distributed correctly, preparing the venue, finalising the agenda and checking that the Chair is suitably prepped. “You have to have done the work beforehand to ensure that the meeting runs well. You can’t just turn up to the meeting and hope that it will go well,” says Brady.
Why a Company Secretary is an asset for Non-Executive Directors and Chairs
Company Secretaries are a first port of call if you are looking for a guide to find something out and they can also act as a bridge to the rest of the organisation. This would be useful, for example, if a Non-Exec wished to learn more about the company’s culture and wanted to speak to employees in the organisation at different sites that are outside of HQ and the boardroom. Co-Secs are also involved in inductions and ongoing development so Non-Execs and Chairs can discuss training needs with them and continue to up-skill in their roles. The role certainly varies from organisation to organisation, but most Non-Execs will find their Company Secretary is an all-too-often untapped fountain of knowledge within an organisation.
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