Company secretary

What is a Company Secretary?

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.

In this article we explore the roles and responsibilities of the Company Secretary.

What does a company secretary do?

Over the years, the company secretary’s role has expanded to include duties beyond merely the keeping of board minutes and handling correspondence of the board of directors. As shareholder focus has driven improved corporate governance and transparency, it has become a position which assists and supports good corporate governance in an organisation. The role can now often encompass such tasks as administering the affairs of the company and supporting the business of the board.

The company secretary’s responsibilities will vary depending on the size and resources of an organisation. In some, the company secretary will be considered the chief governance specialist, relied upon by the board for advice, in addition to legal responsibilities. As the scope of the role of the board has increased, so too has the volume of work and skills required to support the board added to the role of the company secretary.

What are the duties and obligations of a company secretary?

As the role in Australia fall under the definition of ‘officer’ of a corporation (s9 of the Corporations Act 2001), company secretaries have many of the same legal duties and obligations as directors. These include:

• To exercise their powers and discharge their duties with care and diligence (s180);

• To exercise their powers and discharge their duties in good faith and for a proper purpose (s181);

• Not to improperly use their position to gain an advantage for themselves or someone else, or to cause detriment to the company (s182);

• Not to improperly use information obtained by virtue of their position (s183);

• It is a criminal offence if a company secretary is either reckless or internationally dishonest and fails to exercise their powers and discharge their duties in good faith in the best interests of the company, or for a proper purpose (s184).

The ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations makes note of the importance of this position. In the fourth edition released in February 2019, it states in the commentary to Recommendation 1.4:

“The company secretary of a listed entity plays an important role in supporting the effectiveness of the board and its committees. The role of the company secretary should include:

• Advising the board and its committees on governance matters;

• Monitoring that board and committee policy and procedures are followed;

• Coordinating the timely completion and despatch of board and committee papers;

• Ensuring that the business at board and committee meetings is accurately captured in the minutes; and

• Helping to organise and facilitate the induction and professional development of directors.

Each director should be able to communicate directly with the company secretary and vice versa.”

Functions of a company secretary

Company secretaries perform tasks that are both important to compliance and performance. While for the most part their legal duties and obligations have not changed in recent years, their list of other responsibilities has grown.

Company secretaries can be held responsible for the following provisions of the Corporations Act, if not complied with by the company:

• Maintain a registered office, and notify ASIC of any change of address within 28 days;

• Notify ASIC of a change to the principal place of business;

• Lodge notices with ASIC regarding personal details of directors and secretaries;

• Notify ASIC of any issue of shares;

• Lodge financial reports with ASIC;

• Respond to extract of particulars, and return particulars;

• If it is a public company, keep the registered office open to the public during certain hours;

• If it is a proprietary company, notify ASIC of changes to the member register, and notify ASIC of changes to the ultimate holding company.

Other compliance-related responsibilities of this position distinct from other board roles typically include:

• Managing board processes;

• Ensuring members’ and directors’ meetings are called and held at the instruction of the board;

• Ensuring that necessary registers are established and updated;

• Maintaining the company’s financial records;

• Verifying that reports are prepared in accordance with requirements of the Act;

• Ensuring records of members’ and directors’ meetings are kept in compliance with the Act and the company’s constitution;

• Understanding and checking that the company complies with its statutory obligations, ensuring requirements of ASIC and other regulators are met;

• Providing or procuring advice for directors regarding application of the Act, the company constitution, ASX requirements and others;

• Development, communication and implementation of compliance policies, processes and procedures.

Some of the roles of a company secretary that relate to organisational performance are:

• Advising the board on good practice in corporate governance;

• Safeguarding the integrity of the organisation by promoting the compliance framework;

• Providing counselling on standard of ethical and corporate behaviour to the board;

• Ensuring the board has the information it needs to make informed decisions;

• Organising regular board performance reviews;

• Being involved in matters relating to risk management, corporate responsibility, board policy formulation;

• Managing director induction and manuals;

• Organising directors’ and officers’ (D&O) insurance.

Who can become a company secretary?

A company secretary in Australia is not legally required to have any particular qualifications or experience. Yet, as there is a large volume of legal compliance knowledge required, many company secretaries have legal qualifications.

For more information on the role of the Company Secretary, including formal duties and responsibilities, downoad our Role of the Company Secretary Director Tool.