Company secretary is the senior personnel in the corporation. Secretary or company secretary holds a very essential position in the organization. Every private and public company needs to appoint a company secretary. The rules of appointment vary from country to country. Each nation has a separate corporate law, which defines a secretary and on which class of companies are required to appoint such professional on its board, according to law. In some countries law, there is a traditional requirement for private companies to appoint a company secretary.

A company secretary can be called by different names. In India, companies act 2013 is in force and according to it a secretary is known by the name company secretary. In American and Canadian organizations, it is called either secretary or corporate secretary.

A corporate secretary is included in the definition of key managerial personnel. A company secretary along with directors has an important role to play in the company. A CS as an individual or firm is a person or group of persons with high ranking and equipped with a professional skill set.

A corporate is governed by rules, provisions, and guidelines etc. of the companies’ act. It is necessary to comply with the regulations of the act, to avoid penalties or fine levied on the corporation. A company will be regarded as a good corporate citizen by complying with the requirements of the act. It will safeguard the officers from civil and criminal liabilities. Good compliance will even prevent the company from being a victim of waste, fraud, and error. The person who is solely responsible for the compliance in the company is the secretary. Its duty is to protect the corporation and directors from the liabilities imposed on non-compliance by ensuring that the company complies with all guidelines framed in the act.

The role of a company secretary is not a clerical or secretarial one. It has to confirm whether the company complies with all provisions of the law. It is the duty of a company secretary to inform board of directors about their legal requirements. A CS must make sure that effective conduct of administrative procedures is being taken place in the company. It has got the authority to oversee that all policies formulated by board are duly implemented.

Roles and Responsibilities^[i]

A company secretary plays a major role in ensuring good governance practices in a corporation, whether privately or publicly held. With the recent international developments, the new role of company secretary is not only restricted in complying with laws, regulations, rules, and standards. It is also about forming cultures of better practices.

For accomplishment of its goals and fulfilling its responsibilities. A CS is required to possess certain set of skills including interpersonal, communication, organizational and even technical skills. In fulfilling its duties, a CS must act with highest integrity, respect the confidentiality policy of the organization. It must work for the benefit of shareholders and organization by independently carrying out its obligations and not being biased towards anyone.

Functions of corporate secretary^[ii]

Every corporate act provides certain duties and functions to be performed by a company secretary. Similarly, Canada’s corporate laws has framed some functions to be fulfilled by corporate secretary. Such functions include-

• To represent the corporation before various authorities.
• To advice the board on the conduct of affairs of the corporation.

Following duties are assigned to a corporate secretary-

• Secretarial functions- the primary function of company secretary is to handle compliances of the corporation. To see whether company complies with all the provisions of corporate act and other supplementary laws. Other functions of CS are to keep the custody of company’s seal, to ensure business of the corporation is conducted in accordance with its objects, to engage lawyers and other professionals to defend the rights of the corporation etc.
• The corporate secretary handles all the company shares transactions. From issuing shares to payment of dividend. All the requirements are taken care by the CS. It also ensures that all the legal provisions are complied with.
• It is responsible for meeting compliance requirements of corporate records.
• To ensure corporate comply with federal and provisional board governance laws.
• To act as governance liaison for officers and directors.
• To manage subsidiary and other associate companies.
• Other important function is to conduct secretarial audit, the report of which must be attached with the boards report.

A corporate secretary has different roles to play in an organization. It acts as a compliance officer; it can be a part of senior management. In certain cases, having requisite organizational and management skills, it can act as a corporate manager. It is an expert not only in corporate laws but in other related laws also. It can provide guidance on the environment act and provisions, industrial and labor laws, drafting of documents etc. It can advise on intellectual property rights including its management, registration, valuation, audit etc. company secretary has many roles to play outside the ambit of organization. It can act as an intellectual property right expert. It can advise clients on matters connected with IPR. ^[iii]Such matters are-

• IPRs under TRIPs agreement of world trade organization
• Anti-dumping, subsidies, and countervailing duties
• Foreign trade policy and procedures (also issuing certificates thereunder)
• Intellectual property licensing and drafting of agreements.

A corporate secretary provides other services which require expert knowledge. It can act as a registered valuer, it can assist in raising funds from international market via ECB, ADR and GDR etc. It can even provide guidance in corporate restructuring and due diligence which is quite popular nowadays. Its expert services can be extracted in foreign collaboration and joint venture agreements. Due to presence of interpersonal and leadership skills, a corporate secretary can be appointed as an arbitrator and conciliator to guide in resolving domestic and international commercial disputes.

With the recent global developments, the responsibilities of a CS are continuously changing. Its scope of work is not only limited to taking notes at the board meeting or acting as administrative servant of the board in establishing good corporate governance in the corporation. It acts as a bridge between the board and the regulators. Its duty is to represent its company before various authorities and government. Its name is entered as a representative in company’s legal documents.^[iv] The various essential roles of CS are –

1. As a guide – Corporate secretary’s role is to guide board promoters to establish practices of good corporate governance. It assists in complying provisions of the law in true letter and spirit. It now is considered as an active partner in the board, it advises them and act as a source of providing latest information and trends. It has imbibed in its wide knowledge, related not only to corporate laws but of other laws as well. There are different branches of law and for a company it is not possible to appoint a person from every field. So, they can rely on a CS as it has got knowledge of different work areas.^[v]
2. As a champion of good corporate governance – As a corporate is formed up of a distinct legal entity. There is a separation of ownership and management. The corporates depend on such professionals for successful functioning of business. The profession of CS is seen as a champion of good governance and ensures that the corporates fulfill their objectives in accordance with law and provisions of the companies’ act, ethical and moral practices are followed in running a business, to safeguard and promote interest of stakeholders who have invested their hard-earned money provide true for and correct disclosure of information regarding business and its activities.^[vi]
3. As a global leader – Due to changing business environment internationally, it has brought along with-it new challenges and opportunities for CS. It acts as a corporate manager by guiding and advising staff for all the corporate aspects. It even provides solutions to the problems and direct towards effective decision making. A CS as a global leader thinks globally, builds teamwork, embrace change, anticipate opportunity ensure customer satisfaction etc.^[vii]
4. Communication with stakeholders – CS not only fixes meeting of board but also guide them in setting up agenda for the same. CS is a link between board and the business. It is its duty to ensure that accurate disclosures related to corporation. CS is the one who can communicate well with the stakeholders. It can inform and guide board on views and rights of stakeholders. It must also ensure investor grievances are redressed in a timely manner.^[viii]
5. Disclosure and Reporting – CS main aim is compliance reporting. It can do it by drafting compliance related provisions in annual report. It is duty of CS to oversee fair and timely disclosures are made. The annual report is attached with the board’s report. CS must ensure that the copies of annual report are made available to all stakeholders.^[ix]

Scope^[x]

A corporate secretary has a wide scope. A qualifying company secretary has a variety of access to various job roles across different sectors. It has got diversified responsibilities. A respected position which requires working as an active partner with board. It has got along with this job a protentional to earn six figured salary. Due to its qualification and this position being universal. It can get access to various opportunities for working abroad.

A corporate secretary works in variety of sectors in different kinds of organization. It can work in private, government, non-profit organizations. Some provide secretarial services by opening their firms, business, or proprietorships. If a CS has more than 3 years of working experience. It can after clearing CPA exam can be employed as a corporate secretary oversees.

Frequently asked questions

Who appoints Corporate secretary?

A corporate secretary is appointed via resolution of board. In some countries it is called as a company secretary. Every private and public company needs to appoint a company secretary. The rules of appointment vary from country to country. Each nation has a separate corporate law, which defines a secretary and on which class of companies are required to appoint such professional on its board, according to law. In some countries law, there is a traditional requirement for private companies to appoint a company secretary.

What are its responsibilities?

There are various responsibilities to be abide by a Corporate secretary. They are-Reporting to board of directors about compliance of various provisions of the corporate act and other laws applicable to a company. To comply with applicable secretarial standards. To provide guidance to the board on performance of powers, duties, and responsibilities. Acting as a link between company and regulators.

What are its functions?

The primary function of company secretary is to handle compliances of the corporation. To see whether company complies with all the provisions of corporate act and other supplementary laws. Other functions of CS are to keep the custody of company’s seal, to ensure business of the corporation is conducted in accordance with its objects, to engage lawyers and other professionals to defend the rights of the corporation etc.

Reference

[i] The Institute of Company Secretaries of India, secretarial audit, compliance management and due diligence, December 2018

[ii] Gpcanada.org

[iii] The Institute of Company Secretaries of India, secretarial audit, compliance management and due diligence, December 2018

[iv] Ibid

[v] Ibid

[vi] Ibid

[vii] Ibid

[viii] Ibid

[ix] Ibid

[x] www.cgi.org.uk