This allows corporations to attract employees and raise capital from investors. Broadening of fiduciary duty to include long-term and stakeholder perspectives. Moreover, corporations must adhere to a regulatory structure providing flexibility to sustain itself in an effective manner, responding to expectations from shareholders and other investors. These principles such as transparency, accountability, integrity, fairness and responsibility are universal in their application. The company secretary in many organisations is a governance specialist who provides advice to the board as well as fulfilling their legal responsibilities under the Corporations Act. While a blanket limit has been specified by the regulations, the act lays down individual limits for each of the related party transaction specified under section 188 of the act. Over the years, there had been a misapprehension of the concept of a secretary as same has been equated to the position of a clerk. You have successfully registered for the webinar. Lastly, there is a need for the full cooperation of the management of a Company to enable the Secretary to seamlessly and effectively carried out its duties. In other words, if the audit committee has 3 members of which 2 are independent, both the independent directors should be present to constitute quorum for an audit committee meeting. Today the figures of membership of company secretaries have crossed more than 50,000. Assist the Chairman and MD/CEO in coordinating activities regarding the annual Board plan and with the administration of other strategic issues at the Board level; Notify Board members of upcoming meetings of the Board and its committees as well as other matters that warrant their attention; Compile Board papers and ensure that the Boards discussions and decisions are clearly and properly recorded and communicated to relevant persons in a timely manner; Provide a central source of guidance and advice to the Board and the Company on matters of ethics, conflict of interest, and good corporate governance.In addition to his statutory functions, the Company Secretary should carry out the following duties and responsibilities. Similarly, the scams of WorldCom and sat yam are also the result of corresponding consciousness. Managing corporate records and documents. Under CAMA, section 298 highlighted the duties of the Company Secretary as follows: Role Of A Secretary In Promoting Good Corporate Governance. Here the role of a company secretary is to ensure that he/ she develop the code of conduct for the board of directors in consultation with the top management of the company. Instead of purely clerical duties, the Office of the Company Secretary is of a crucial - and still increasing - significance for effective corporate governance and must be rather described as the company's administrative officer empowered to exercise specific functions and responsibilities under Maltese law. The role of the company secretary in supporting board effectiveness can sometimes be overlooked. Indian Companies Act, 2013. Without prejudice to the provisions of extant laws, the Company Secretary should be a person with relevant qualifications and competence necessary to effectively discharge the duties of his office. just a note its Kumar Mangalam Birla Committee (not Mandalay!). Due to developing economies around the world, many companies can enter new markets and play a vital role in enhancing nations. Company Secretary and Corporate Governance, Corporate Governance Law: Everything You Need To Know, Importance of Corporate Law: Everything You Need To Know, Difference Between Corporate and Non-Corporate. Corporate governance is concerned with maintaining the balance between the economic interests of the company and social goals. Corporate secretary duties are far more complex. It, therefore, behoves on the Company Secretary to ensure that good corporate governance practice is enshrined. A corporate secretary in the boardroom is one of the most important resources the board has. Financially literate has been defined to mean the ability to read and understand basis financial statements and having accounting or related financial management expertise is defined to mean having requisite professional certification in accounting or any other comparable experience or background which results in the individuals financial sophistication including being a CEO or CFO or such other senior officer with financial oversight responsibilities. Secondly, to guide the directors about their duties. The role of CS includes advising the Companys Board of Directors of the Company on good corporate governance practices and compliances with the rules and regulations. of the board shall comprise of independent directors and where the chairperson is an executive director, of the board shall comprise of independent directors. Over the last decade, there has been about five different sector-specific Codes of Corporate Governance in Nigeria this includes; Code of Corporate Governance for the Telecommunication Industry 2016, issued by the Nigerian Communications Commission; Code of Corporate Governance for Banks and Discount Houses in Nigeria 2014 issued by the Central Bank of Nigeria; Code of Corporate Governance for Public Companies in Nigeria 2011 issued by the Securities and Exchange Commission; Code of Good Corporate Governance for Insurance Industry in Nigeria 2009 issued by the National Insurance Commission; and Code of Corporate Governance for Licensed Pension Fund Operators 2008 issued by the National Pension Commission. A company secretary plays a major role in ensuring good governance practices in a corporation, whether privately or publicly held. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb. The laws in governing a corporation are meant to protect the public and society. This is achieved by assisting the Chairman in ensuring that the development processes which includes board evaluation, training, and induction is adopted. For is compliance board of directors shall provide affirmation to the compliance of the code at each and every first meeting of the board held in each financial year. In case the non-executive chairperson is a promoter or related to the promoter or any other person occupying management position in the board of directors or at one level below the board of directors, at least of the board of directors shall comprise of independent directors. THE ROLE OF THE COMPANY SECRETARY IN CORPORATE GOVERNANCE CHAPTER. Overall, the idea of corporate governance is based on the balance of social goals and economic well-being. In compliance with the Securities and Exchange Commission Act (No. A company secretary shall ensure that the company holds at least 1 meeting of the board of directors in each quarter but the gap between two meetings shall not exceed more than 120 days. Where the Company Secretary is an employee of the company, he should be a member of senior management and should be appointed through a rigorous selection process similar to that of new Directors. Rule 6a of the companies (meetings of board and its powers) rules, 2014 stipulates that all related party transactions shall require the approval of the audit committee after the same is approved by the board of directors. Omnibus approval by the audit committee for related party transactions has been provided in both the regulations and the act. In practice, the Company Secretary's job has expanded far beyond the minimum legislative duties. Section 205 stipulates the functions of CS in a company. The Board should ensure that the person appointed has the gravitas and objectivity to provide independent guidance and support at the highest level of decision-making in the company. Roles & Responsibilities of a Company Secretary A Company Secretary performs various administrative and corporate governance tasks in compliance with the provisions of the Companies Act such as taxation laws, shareholder's rights, business structure, statutory laws, industrial and economics laws applicable to the company namely; This raises compliance issues, because the pressing responsibilities of those executives do not allow them to assure all of these extra burdens. Study Resources. Different institutions define corporate governance differently. ROLE OF COMPANY SECRETARY IN EVOLVING CSR: The role and importance of Company Secretary in the corporate world and Corporate Governance is very well established. Company secretary not only acts as the kmp of the company but he acts as the compliance regulator of the company. The Team. 1 Crore per transaction and the rule has not specified any limit for the value of transaction seeking omnibus approval. Therefore, owners operate with various incentives to remain in business by operating the company in an equal and just manner. Todays business faces multitude of challenges, increasing business pressure on all the fronts, globalization, shorter product life cycles, cyber security, over capacity, complex rules and regulations by the government, currency volatility, and value migration etc. The Secretary also has a role to play in ensuring that the meetings are held and also take measures to ensure compliance with the resolutions, actions points and report on matters arising. Further the listing regulations have also mandated a quorum for the audit committee meetings, which shall be either two members or 1/3rd of the members of the committee, whichever is greater with at least 2 independent directors. The framework of such governance is in place to foster an efficient consumption of resources, and to call for the accountability and ethical distribution of such resources. Save my name, email, and website in this browser for the next time I comment. The Corporate Affairs Commission (CAC); the body ceased with the responsibility of enforcing the provisions of CAMA, by its public notice ofJanuary 27, 2011 called on all companies to appoint Company Secretaries and duly file the requisite CAC form with the Commission to avoid penalty. Further while material related party transactions to be entered into by the company would require prior approval of the shareholders in the general meeting by way of an ordinary resolution, the regulations contain a restrictive clause that all the related parties shall not vote on the resolution. Where this is achieved, it makes liaising with the regulators easier and cordial. That being so, much of what constitutes corporate governance has to be voluntary. Second, it allows GCs to be proactive in meeting the corporation's needs in recruiting legal expertise and other areas. Hence, any transaction by the company, in addition to what is specified under section 188 of the Companies Act, 2013 with a related party as defined under section 2(76) of the Companies Act, 2013 shall require prior approval of the audit committee. It was observed that the. Stake holders include the following parties: The management of bad governance can come if the following forms: If you need more information on a company secretary and corporate governance, post your legal need on UpCounsels marketplace. The Board is confident that it is applying the QCA Code across the main areas of delivering growth, maintaining a dynamic management framework and building trust. Accordingly, the promotion of Corporate Governance principles is incidentally within the scope of the responsibilities of Company Secretaries. The companies act stipulates that the policy shall be included in the board report, while no such requirement has been made in the listing regulations. A company that engages in such activity violates the public trust and harms people who have access to such bodies of water. Recently, the narrative has somehow changed, and the position of a Company Secretary is now regarded as that held by an officer of the company and it has been made mandatory for Companies to have Secretaries. A company secretary is an individual who usually assists the corporate governance, corporate planning and strategy development of a company. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. ***** Jarwal, The Role of Company Secretary as Governance Officer . Director Duties. Learning Compliances Role of Company Secretary in Corporate Governance. The regulations further stipulate that the code shall incorporate the duties of the independent directors as laid down in the Companies Act, 2013. The Companies Act, 2013 however specifies that companies which are listed shall have at least 1/3rd of its board of directors as independent directors without making a distinction between the requirements for appointment of the number of independent directors when a chairperson of the board of directors is an executive or a non-executive director. It was believed that Secretaries are not liable to the company for their actions and thus, were not regarded as an officer of the company. The Company Secretary should have both functional and administrative responsibilities. Company secretary is responsible for appointment of independent directors in such a way that the directors fulfill the criteria laid down in companies act and listing regulations. By the principles of the Nigeria Code of Corporate Governance 2018, particularly principle 8, the duties of a secretary in promoting the corporate governance principle is highlighted. The company secretary usually has responsibility for drafting the governance section of the companys annual report and ensuring that all reports are made available to shareholders according to the relevant regulatory or listing requirements. Having said that, it is pertinent to note that, good corporate governance involves a commitment of a company to run its business in a legal, ethical and transparent manner- a dedication that must come from the very top and permeate throughout the organisation. Corporate governance is concerned with holding the balance between economic and social goals. The core roles are identified, relevant in terms of the historic development of the office and the South African specific definition of corporate governance, to be tested against practice by way . These challenges will bring about economic discontinuities that are unprecedented in scale and scope, and would require highly innovative approaches. States approve of corporations because they create jobs and contribute to the economic well-being of state and national economies. Hire the top business lawyers and save up to 60% on legal fees. Also, the Company Secretary makes the arrangements for the meetings, but these are actually called or better word convened by the Directors. The position of the company secretary avails them the opportunity of having a holistic view of the governance framework, thus, it is the generally responsibility of a Company Secretary to ensure that the frameworks and any supporting policies and procedures are clearly documented for ease of reference by the management. However the companies (appointment and qualification of directors), rules 2014 specifies that public companies having a paid up capital of Rs. Through the use of the Companies Act and the Kings report the company secretary ensures directors are kept abreast of relevant legislative and regulatory developments. Corporate Compliance and Corporate Governance are important areas for effective capital markets and corporate growth. Chapter 5 gives an overview of the roles of the board, the chairman, the senior independent director (SID), the company secretary and board committees. While the duties of a corporate secretary are stipulated in a . In reality, as we will notice later, it has many roles and functions. The responsibilities of the company secretary have been limited only to assisting and supervising board workflows, which can be seen in these areas: Preparing and documenting board and committee meetings. Nice. Mrs. Camille Facey, Attorney-at-Law, will be one of the Facilitators The responsibilities of the modern-day corporate secretary have evolved globally, from that of a recorder of minutes at Board meetings or administrative assistant to the Board to one of a "Board advisor" with added responsibility for the organization's corporate governance. Main Menu; by School; by Literature Title; by Subject; by Study Guides; Textbook Solutions Expert Tutors Earn. Interestingly company secretaries assumes pivotal role in both corporate compliances and implementation of corporate governance codes. This is achieved by scheduling the requisite meetings for the Board and the Company generally and also preparing the agenda and sending out the due notice for the meetings. The aim is to align as nearly as possible the interest of individuals, corporations and society. Company secretaries around the world have been given the responsibility for good corporate governance practices to be followed by companies. Further the regulations state that the approval shall be valid for a period not exceeding one year and fresh approvals shall be taken after the expiry of one year, but rule 6a states that the approval shall be valid for one financial year and fresh approval shall be taken after the expiry of the financial year. The company secretary should play a key role in the induction process of new directors, encompassing both directors' duties and responsibilities in general and specific matters pertaining to the company itself and the industry in which it operates. Want High Quality, Transparent, and Affordable Legal Services? In case the non-executive chairperson is a promoter or related to the promoter or any other person occupying management position in the board of directors or at one level below the board of directors, at least of the board of directors shall comprise of independent directors. Includes 'Checklist: for an effective board' Company secretary shall ensure that company shall have a policy on preservation of documents and shall divide the same in two parts whose preservation is permanent and which needs to be preserved for not less than 8 years. It is also incumbent on the corporation to treat locals who work for a company with respect and not unjustly absorb most of the natural resources of an area, with the locals seeing little benefit. | Powered by, Role of Company Secretary in promoting Good Corporate Governance. ROLE OF COMPANY SECRETARIES v Pursuant to section 383A of the Companies Act, 1956, companies with a paid-up share capital of Rs.Two crores or more are compulsorily required to appoint a whole time Company Secretary who must he member of the Institute of Company Secretaries India. Under law, CS has a critical role to play in organizing and implementing boards decisions, its committees, general body meetings. In Nigeria, the principle of Corporate Governance has been accepted and this is evidenced by the influx of many Codes of Corporate Governance in Nigeria. He/ she now makes valid representations on behalf of the company and is actively involved in the managerial activities of the company. The core responsibilities of a Company Secretary/Governance Professional. A mix of regulations and laws that require voluntary practices from the private sector. A company secretary also plays the role of a chief advisor to the board of directors on best practices in corporate governance and helps the organization in managing legal matters. The Member is expected to use his or her influence to promote good corporate governance (3.1) Specifically, the Member should assist directors in their . This will also strengthen the economy of the company whilst eliminating the chances of any fraudulent activities and mismanagement. According to the World Bank, Corporate governance is blend of law, regulation and appropriate voluntary private-sector practices which enable the corporation to attract financial and human capital, perform efficiently, and perpetuate itself by generating long term economic value for its shareholders while respecting the interests of stakeholders and society as a whole. Under state corporation laws, every public company is required to have a corporate secretary, and the individual who fills this role is a valuable member of the executive management team. The word derives from the Latin secretaries, meaning a confidential officer, connected in turn with secretum, which means secret. A Secretary is no longer regarded as a mere clerk. The team specialises in supporting clients on all aspects of governance, transactions and compliance and are front of UK and global corporate governance reforms, providing market leading thought leadership in the industry. It is also about forming cultures of better practices. 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It is the primary duty to perform the basic secretarial functions which include issuing notices of meetings, preparing agenda for the meeting, convening and conducting the meeting as well preparing the minutes of meetings of Board of Directors, Shareholders, Annual General Meetings and any other meetings involving the company. 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