The invaluable role of the company secretary
Consultant, Campbell Tickell
Good governance is integral to the success of every business in an increasingly complex world, particularly post the COVID-19 pandemic. The role of the company secretary (and other governance professionals) is crucial to this process.
Today, the company secretarial function is more important than ever, 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 are 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 they can reduce 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 nature 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. A good company secretary enables the board to function to its potential in driving the long-term success of the business and ensuring that it is 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. Company secretaries are primarily responsible for promoting high governance standards and recognising and responding to opportunities for governance improvement.
They are 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, however, 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.
4. Improved governance
Even through the current COVID-19 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.