“The opportunity is there for the corporate secretary to be responsible for ensuring sound corporate governance practice, to be the repository of governance knowledge and advice, and to be the source of the company’s conscience ensuring corporate integrity takes precedence over short term gain and personal benefit”

[Baldwin, quoted in Twenty Steps to Better Corporate Governance, March 2010, CSIA].

The Companies Act, No 71 of 2008 (the Act) prescribes that all public and state-owned companies are required to have a Company Secretary. The role and responsibility of the Company Secretary is outlined in Section 88(1) – (2) of the Act and can be summarised as follows – noting that this is not an exhaustive list:

  • Providing the directors of the company collectively and individually with guidance as to their duties, responsibilities and powers
  • Making the directors aware of any law relevant to or affecting the company
  • Reporting to the company’s board any failure on the part of the company or a director to comply with the Memorandum of Incorporation or rules of the company or the Act
  • Ensuring that minutes of all shareholders meetings, board meetings and the meetings of any committees of the directors, or of the company’s audit committee, are properly recorded in accordance with the Act
  • Certifying in the company’s annual financial statements whether the company has filed required returns and notice in terms of the Act, and whether all such returns and notices appear to be true, correct and up to date
  • Ensuring that a copy of the company’s annual financial statements is sent, in accordance with the Act, to every person which is entitled to it
  • Carrying out the functions of a person designated in terms of Section 33(3) of the Act

In addition to the Act, the King III Report (2009) captures a more holistic view of the role played by a Company Secretary. Some of the duties attributed to the Company Secretary are outlined in the report and the Institute of Directors Southern Africa (IDSA) lists them as follows:

  • The company secretary should assist the nomination committee and ensure that the procedure for the appointment of directors is properly carried out
  • The company secretary should assist in the proper induction,orientation, ongoing training and education of directors, including assessing the specific training needs of directors and executive management in their fiduciary and other governance responsibilities
  • The company secretary should have a direct channel of communication to the chairman and should be available to provide comprehensive practical support and guidance to directors, with particular emphasis on supporting the non-executive directors, the chairman of the board, the chairman of committees and the audit committee
  • The company secretary should ensure that the board and board committee charters and terms of reference are kept up to date
  • The company secretary should be responsible for ensuring the proper compilation and timely circulation of board papers and for assisting the chairman of the board and committees with drafting of yearly work plans
  • The company secretary should have the duty to obtain appropriate responses and feedback to specific agenda items and matters arising from earlier meetings in board and board committee deliberations
  • The company secretary’s role should also be to raise matters that may warrant the attention of the board
  • The company secretary should assist the board with the yearly evaluation of the board, its individual directors and senior management

As can be seen, the role played by a Company Secretary is one of vital import in an ever-changing corporate governance landscape and serious consideration needs to be given by the board of directors when appointing one due to the nature and level of input expected.

This article is courtesy of our partner Moore Stephens: http://southafrica.moorestephens.com/Home.aspx

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