“I have a foreboding of an America in my children’s or grandchildren’s time — when the United States is a service and information economy; when nearly all the manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness. The dumbing down of America is most evident in the slow decay of substantive content in the enormously influential media, the 30-second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance.”
Pulitzer Prize winning author and scientist, Carl Sagan, wrote these words nearly 30 years ago in “The Demon-Haunted World: Science as a Candle in the Dark”.
What do they have to do with a corporate officer or governance function within a company? Everything.
For the position to be appreciated by their colleagues, company secretaries have suggested that their role be relabelled as governance officers. Directors conflate the role of a personal assistant with that of a company secretary because taking care of meeting minutes and logistical arrangements prior to a meeting are often the most visible contribution to the meeting. This misunderstanding has resulted in the de-skilling of the role. As Sagan predicts, the decay of substantive content in any social context has negative consequences for all institutions.
To ensure that the role of company secretary is not undermined, the directors of a company should appoint a professional as the attributes of a company secretary are akin to those of an attorney or an auditor. The company secretary is the custodian of the company’s statutory information and is responsible for ensuring that submissions to various regulatory bodies are made. This is not a role to be underestimated nor one that should be denuded of the authority that is required to ensure sound corporate governance.
I share five suggested attributes, both attitudinal and behavioural, that I believe make a good company secretary.
- Meticulous: To ensure that, for example, resolutions are prepared correctly and executed as per the relevant disclosure requirement, a company secretary should be attentive to detail. During a board meeting, it is your role to advise the chairman on the legalities of voting rights, minority protections and shareholder relations.
- Conscientious: To gain an understanding of corporate legal frameworks, the company secretary must review the constitutional documents of the company as well as the amended legislation and potential amendments to company legislation that may have an impact on the company. Search engines and even ChatGPT cannot provide these specific answers given that the skill here is to select the applicable content and then contextualise it for the chairman and the board. In the absence of a formal board, the same work is required to brief the executive team within the company. This work takes time and patience. A company secretary keeps exceptional notes and develops a system to categorise the relevant administrative steps and processes that are required to keep the company compliant. This isn’t glamorous work that is ever seen by the directors or shareholders but without it, the company will be reactive rather than proactive in its compliance and strategy.
- Scholarly: This shouldn’t be taken to mean overly academic. A good company secretary reads topical articles and stays informed of changes in legislation that might have an impact on the company or the industry within which the company operates. Engaging with scholarly interpretations of legislation and any newly promulgated regulations will enable the company to potentially gain or advance its competitive advantage. Exploring thought leadership in business forums and interacting with corporate officers from varied industries also enables the company secretary to anticipate changes in the regulatory environment which adds tremendous value to the company.
- Confident: The boardroom or executive committee of a company is a cauldron of competing interests. The job of the director is to determine how best to apply corporate resources to maximise on the opportunities that are being created by the company. Therefore, a company secretary needs to be able to speak up in this environment and share the knowledge that they have gained along the way to guide the thoughts and actions of the board. This is not to say that their advice or opinion will be followed, so they must also be self-assured enough to be deemed wrong or to be ignored and to continue providing input and feedback. Confidence is not arrogance or waving a regulatory stick at the directors. It is the provision of sound guidance that is supported by expertise, hard work and experience.
- Honourable: A company secretary must operate with integrity. They must be trustworthy, given their exposure to confidential information. They owe a duty of care to the company and are often the only advocate for what is in the company’s best interests, sometimes in conflict with those of the directors or shareholders. There is prescribed training to become a chartered company secretary that includes the technical skills mentioned herein. Integrity and work ethic cannot be codified but without these attributes the company will not realise the full benefit of the position.
When cost cutting, the company often terminates the services of a professional company secretary and substitutes them with a competent minute-taker. This practice has resulted in the function of a company secretary being misunderstood and often under-resourced, and the impact on the company soon becomes evident. There is tremendous substantive value to be gained by employing a professional company secretary who exhibits these traits and uses them effectively to support a board to achieve greater results.
