The role of a company secretary has evolved from that of being merely an administrative role to ensuring increased focus on good corporate governance practices in organisations.
This additional importance of the role has been greeted with legislative reforms across a number of countries. In Ghana, for example, eligibility requirements have been introduced for company secretaries and companies are now required to appoint only those who have technical knowledge or a special set of skills in corporate governance to the role.
As the provider of a crucial corporate governance advisory service, there are several ways in which a company secretary can add value in a boardroom, as set out below.
Documentation of Policies and Practices
It is important that the roles, functions, obligations, rights, responsibilities and powers of the board are clearly documented and are available to all board members. A company secretary must ensure that there is a board charter or manual in place to regulate the board and that this charter incorporates industry requirements as well as good corporate governance standards. Terms of reference for board committees and key policies such as a delegation of authority must, also, be put in place and be reviewed regularly to ensure adherence to best practices. It is important to ensure that these policies and practices are provided to new directors during their formal induction.
Board Evaluations and Board Assessments
A company secretary must facilitate the undertaking of performance assessments for the board and its members to evaluate their effectiveness and performance. This can be in the form of annual board evaluations and such assessments should be based on set targets, which may be varied from time to time. A company secretary must work with the chairperson of the board to ensure that action plans that come out from such evaluations turn into results.
Legislative and Corporate Governance Updates
One of the core functions of a company secretary is to inform the board of relevant legislation applicable to it and its meetings. The board must be informed of new and possible changes to the Companies Act as well as best corporate governance practices to ensure adherence to these at all times. Timely updates will also ensure that the company can plan in advance before the implementation of any new amendments or policies.
Organisation of Board Meetings
The success of board meetings largely depends on the company secretary. A company secretary must ensure that adequate notice is provided to all directors for board meetings. The efficiency and effectiveness of directors at meetings is also largely dependent on the quality of information received ahead of such meetings. The job of the company secretary is to ensure that board papers are received on time by directors to afford them an opportunity to review them ahead of the meeting. Pre-board meetings should also be held with the chairperson of the board and management of the company to finalise the agenda for the meetings, timelines for board papers, and other relevant matters. It is also important that the company secretary ensures that a board calendar is drafted for each year to ensure that all relevant matters are covered in the agenda for board meetings planned in a particular year.
Stakeholder Management
The company secretary serves as a liaison between the shareholders, board and management and must communicate decisions of the board to management. It is important for a company secretary to cultivate a good working relationship with these crucial stakeholders to ensure the smooth running of the business. Having regular pre- and post-board meetings with the chairperson of the board and the Chief Executive Officer is one way of achieving this.
By taking care of the above in a detailed and pro-active manner, company secretaries support board and business performance, which allows for economic growth and impacting others positively.
