- July 24, 2020
- Posted by: Rianna
- Category: CT Blog
CT Consultant, Sade Joseph discusses the importance of having a Company Secretary within an organisation.
Strong governance has far reaching benefits for all businesses, including: better strategic outcomes, business growth and sustainability (we’ll touch on this more later in this blog).
Governance is integral to the success of every business in an increasingly complex world, particularly post the COVID-19. Here, we discuss why Company Secretaries (and other governance professionals) have an invaluable and unique role to play in establishing sound governance.
While some Company Secretaries are given the prominence and gravitas the role deserves, too often the value of their presence is not fully recognised or used. It is easy, and to some extent understandable, to fall into the trap of thinking that the role is purely administrative: after all, the term ‘secretary’ is commonly, even if erroneously, often understood to denote a relatively junior or ‘unskilled’ role.
In addition, the complexity and importance of governance itself are often underestimated This also contributes to underestimating the value of the Company Secretary role and poses a significant risk to businesses’.
Today, the company secretarial function is in fact ever more important, with growing demands for higher governance standards and Board performance, especially in the planning of the new normal after the pandemic. Although the specific duties of Company Secretaries (and how these are allocated within the staff team) vary between organisations, all businesses can reap the many benefits of the role, some of which we have summarised here:
1. Supporting compliance and reporting
With the right access to data and reporting, Company Secretaries can quickly detect areas of non-compliance, thus reducing the risk of businesses (in any sector): incurring legal or regulatory sanctions; attracting greater scrutiny; and diminishing investor, lender and stakeholder (including regulator) confidence.
Company Secretaries are well-attuned to the fast and ever evolving volume of governance expectations, shaped by legislation, regulation, public attitudes and today’s big societal issues. For example, those relating to equality, diversity and inclusion; environmental sustainability; data protection; and the content and timing for Companies House filings and regulatory returns. Company Secretaries can brief Directors about these developments and diligently monitor that the organisation not only complies with such requirements but goes beyond the minimum expectations where desired.
2. Maximising Board effectiveness
Company Secretaries are a reliable and independent source of advice and support for the Board, the most senior leaders of an organisation, who are ultimately responsible for its governance. A good Company Secretary enables the Board to function to its highest potential and effectively execute its pivotal responsibilities for driving the long-term success of the business and ensuring that it’s run appropriately. Company Secretaries cultivate optimal ingredients for Board effectiveness, such as: an understanding of Board duties and purpose; swift and well-informed decision making; optimised skills and composition; robust risk management; and healthy boardroom dynamics and culture, to name a few. Most importantly, a Company Secretary acts as an aide to the Chair, who is the catalysing ingredient for a high performing Board. Without a Company Secretary, opportunities to enhance Board performance may be overlooked.
3. Provision of expert and devoted attention to all governance matters
Company Secretaries enable leadership teams to concentrate on the smooth running of the business, safe in the knowledge that governance matters are being prioritised and proactively handled with the necessary proficiency and adequacy.
Company Secretaries are primarily responsible for promoting high governance standards and recognising and responding to opportunities for governance improvement. They’re commercially astute and have the requisite specialist expertise to promote and facilitate the embedding of effective governance standards into the organisation’s everyday practices.
Where organisations have insufficient resources (or haven’t seen the need) to have a dedicated Company Secretary, the role is often undertaken by existing staff such as the Chief Executive, Finance Director or Administrator. With this approach, there is a risk that insufficient time and attention is available to support and develop the organisation’s governance. The role holder may also not have had an opportunity to develop either the experience or expertise they need to be effective in the role.
4. Good Governance
Ultimately, good governance lies at the heart of every successful business. “Good governance is not a ‘nice-to-have’, it’s a must-have“, as once said by Charlotte Valeur, Chair of the Institute of Directors. Even through the pandemic, businesses need to maintain the momentum towards governance improvements.
Achieving stronger governance by valuing and effectively using the skills of a Company Secretary, however the role is delivered (in-house or outsourced), can support an organisation to achieve benefits including:
- Better strategic outcomes (e.g. more profit, growth or fulfilling the core purpose of the organisation);
- Enhanced reputation;
- Greater assurance for potential partners and investors;
- Strengthened risk management; and
- Increased agility and resilience during unforeseen crises, such as COVID-19.
Company Secretarial Support
We are now offering cost effective and efficient company secretarial support to the housing, charity and sport sectors.
To find out how CT can help your organisation be compliant and embed sound systems of governance, visit the company secretarial support page or contact the Governance Team on: email@example.com or call +44 (0)208 830 6777