A company secretary is a senior position in a private company or public organisation, normally in the form of a managerial position or above. In the United States it is known as a corporate secretary.
Despite the name, the role is not a clerical or secretarial one in the usual sense. The company secretary ensures that an organisation complies with relevant legislation and regulation, and keeps board members informed of their legal responsibilities. Company secretaries are the company’s named representative on legal documents, and it is their responsibility to ensure that the company and its directors operate within the law. It is also their responsibility to register and communicate with shareholders, to ensure that dividends are paid and to maintain company records, such as lists of directors and shareholders, and annual accounts.
In many countries, private companies have traditionally been required by law to appoint one person as a company secretary, and this person will also usually be a senior board member. The earning capacity of senior level company secretaries is often underestimated. The average salary of a company secretary working in a FTSE 100 organisation is £180,000.[citation needed] Due to the current economic down turn in Ireland, the average salary of a trainee assistant company secretary has been revised to €16,000.
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Roles and responsibilities
Company secretaries in all sectors have high level responsibilities including governance structures and mechanisms, corporate conduct within an organisation's regulatory environment, board, shareholder and trustee meetings, compliance with legal, regulatory and listing requirements, the training and induction of non-executives and trustees, contact with regulatory and external bodies, reports and circulars to shareholders/trustees, management of employee benefits such as pensions and employee share schemes, insurance administration and organisation, the negotiation of contracts, risk management, property administration and organisation and the interpretation of financial accounts.
Company secretaries are the primary source of advice on the conduct of business and this can span everything from legal advice on conflicts of interest, through accounting advice on financial reports, to the development of strategy and corporate planning.
Among public companies in North America, providing advice on corporate governance issues is an increasingly important role for corporate secretaries. Many shareholders, particularly institutional investors, view sound corporate governance as essential to board and company performance. They are quite vocal in encouraging boards to perform frequent corporate governance reviews and to issue written statements of corporate governance principles. The corporate secretary is usually the executive to assist directors in these efforts, providing information on the practices of other companies, and helping the board to tailor corporate governance principles and practices to fit the board's needs and expectations of investors. In some companies, the role of the corporate secretary as corporate governance adviser has been formalized, with a title such as Chief Governance Officer added to their existing title.[1]
In view of the important roles the company secretary plays in business, PLCs and large companies require the company secretary to be suitably trained, and professionally qualified for these responsibilities.
The company secretary may be qualified by virtue of examination and membership of the Institute of Chartered Secretaries and Administrators (ICSA), which is the only qualification specifically for company secretaries. ICSA is the only body dedicated to the advancement and recognition of professional administration based on a combination of degree-level studies, carefully vetted experience and sponsorship by two people of professional status. Only a person thus qualified is entitled to be designated a 'Chartered Secretary' or 'Chartered Company Secretary'.
Chartered secretaries are employed as chairs, chief executives and non-executive directors, as well as executives and company secretaries. Some chartered secretaries are also known in their own companies as corporate secretarial executives/managers or corporate secretarial directors.
Many corporate secretaries of North American public companies are lawyers and some serve as their corporation's general counsel. But while a legal background is quite helpful in performing the role of corporate secretary, it is not essential. In fact, at times, having a corporate secretary who also provides legal advice creates interesting questions as to whether particular communications made to management are legal advice – which may be subject to the attorney-client privilege – or general corporate/business advice, which is not. Thus, the "dual hat" corporate secretary/lawyer must always be careful to distinguish (and, as corporate secretary, record) which "hat" is being worn, and whether it is legal or managerial advice that is being given to directors and management.[1]
United Kingdom
In the UK, there is now NO specific legal requirement for the appointment of a company secretary for a public limited company or publicly traded company. This was not so prior to the amendment to the current regulation before the 22 September 2009, it was a legal requirement for any kind of company to appoint a company secretary. Should the Director(s) of a company wish to appoint a company secretary then this is still allowed.
India
In India every company having a paid up share capital of Rs. 5 crores or more are required to appoint a qualified person as Company Secretary. A qualified Company Secretary should be a member of Institute of Company Secretaries of India headquartered in New Delhi. A company having not less than Rs. 10 lacs paid up capital and not required to appoint a full time company Secretary should file with Registrar of Companies, a compliance certificate signed by a practicing Company Secretary.
Section 383A of the Companies Act, 1956 provides for the mandatory appointment of a whole time secretary where the paid up capital of the Company exceeds Rs. 5 crores. In case where the capital is less than Rs. 5 crores, the company is required to obtain a secretarial compliance certificate and attach the same to the Directors' Report and file it with the Registrar of Companies.
Statutory declarations of compliance under various other provisions of the Companies Act, 1956 are also to be certified by practising company secretaries. Under the MCA 21 e filing regime several forms (including some, exclusively) are required to be pre-certified by practising company secretaries.
In the case of companies listed on recognized stock exchanges, the annual returns are to be signed by a practising company secretary.
Further, the Securities and Exchange Board of India (SEBI) also recognizes the Company Secretary as the Compliance Officer and the practising company secretary to issue various certificates under its Regulations. Further, the practising Company Secretaries are also authorised to certify compliance of conditions of corporate governance in case of listed companies.
The Reserve Bank of India also authorises company secretaries to issue various certificates.
The Institute of Company Secretaries of India, is the premier professional body to develop and regulate the profession of Company Secretaries in India. It was set up by an Act of Parliament in 1980. The profession has its origins in England.
See also
- Professional organisations
- United Kingdom - Institute of Chartered Secretaries and Administrators (ICSA)
- Hong Kong - The Hong Kong Institute of Chartered Secretaries (HKICS)
- India CS - Institute of Company Secretaries of India (ICSI)
- New Zealand - Chartered Secretaries New Zealand (CSNZ)
- South Africa - Institute of Chartered Secretaries Southern Africa (ICSA)
- Singapore Association of the Institute of Chartered Secretaries and Administrators (SAICSA)
- United States - The Society of Corporate Secretaries & Governance Professionals
- Australia - Chartered Secretaries Australia (CSA)
References
External links
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