One of the key ingredients in establishing a profitable business and company not just in Nigeria but everywhere in the world is a properly structured system. This system cannot be complete without the immerse contribution and undeniable role of a company secretary.
The role of the modern-day company secretary has evolved from that of a “note-taker” at board meetings or “administrative servant of the Board” to one which encompasses a much broader role of acting as “Board advisor” and having responsibility for the organization’s corporate governance. Although section 330(1) of CAMA 2020 provides that every company except a small company shall have a secretary, the company secretary is important in the performance of both administrative and regulatory support to the directors and company at large.
Furthermore, section 332 of the CAMA 2020 gave explicit provisions on who can be a company secretary to include individuals who are members of the institutes of chartered secretaries and administrators, any professional body of accountants, legal practitioners within the meaning of the legal practitioner’s act, persons who have held the office of the secretary of a public company for at least 3 of the 5 years immediately preceding his appointment in a public company and an entity (body corporate or a firm) consisting or members mentioned above.
The Institute of Directors describes the Company Secretary “…as the guardian of the company’s proper compliance with both the law and best practice”. A company secretary is considered an officer of the company and shares many legal duties with the company directors, as well as some special ones accorded to them personally. The task of the Company Secretary, therefore, is to perform functions which are of administrative and governance importance in the company. Such an entity must ensure that the provisions of the Articles of Association, all statutes regulating the operations of the company, rules, and regulations as well as international or sector-specific corporate governance policies are all complied with.
The significant contribution of a company secretary cannot be understated, their role of legal record keeping, reporting requirements, ensuring the efficient administration of business, and corporate governance can be seen in the following perspectives:
Role as a Coordinator
- The company secretary (body corporate, legal entity) coordinates the activities of various departments and units in the company and keeps liaisons with the directors, staff, and other shareholders of the company.
- acts as a communicating channel between the board and the executives and coordinates the actions of the executives according to the directions given by the Board.
- ensures the security of the company’s legal documents by safekeeping the company’s statutory books and records.
- ensures the effective and efficient implementation of the management policies decided by the Board.
- The company secretary also acts as an advising and coordinating agent in cases of issue of shares, drafting of prospectus, sale letter, issues related to securities, private placement and buyback of shares, raising funds from international markets, loan syndication, and documentation.
Role as an Administrator
- The Company Secretary (body cooperate, legal entity) acts as the backbone of the company and formulates decisions upon which the structure of the company administration is established.
- gathers necessary information related to various aspects and departments of the organization and uses it to assist the management to establish a strong and uniform structure.
- serves as a watchdog and ensures that the members of the company work in accordance with the rules and regulations of the company’s policy. He does this by routinely checking on the various functions, duties, decision-making, and inter-relations of the departments and the employees to maintain a balanced administration.
- The company secretary as an administrator acts in the field of financial administration, office administration, personnel administration, administration of company’s properties, maintenance of corporate records, and safety of personnel and property.
Role as a Cooperate Governance Officer
The company secretary is the principal person or body corporate to ensure corporate governance laws are complied with, such an entity acts as an officer of the law by:
- Advising the board on good practice in corporate governance, e.g. giving guidance on the legal implications of the way it discharges its duties, runs meetings, and makes decisions
- The company secretary usually has responsibility for drafting the governance section of the company’s annual report and ensuring that all reports are made available to shareholders according to the relevant regulatory or listing requirements.
- Promoting the compliance framework to safeguard the integrity of the organization. The nature of compliance will mostly include a rendition of periodic statutory returns to the appropriate agencies, e.g, Corporate Affairs Commission (CAC), the Nigerian Stock Exchange (NSE), the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), Financial Reporting Council (FRC), etc.
- Ensuring accuracy and reliability of financial reports and corporate disclosures, pursuant to the various laws and regulations currently in existence; and harmonizing activities of relevant professional and regulatory bodies as relating to Corporate Governance and Financial Reporting.
- Ensuring the board has the information it needs to make informed decisions.
- The secretary would also be involved in risk management and corporate responsibility matters such as income tax planning, drafting of legal documents; in matters of intellectual property rights; guiding in policies of merger; amalgamation and joint ventures, etc.
Due to the fact that the role of a company secretary is heavily administrative in nature, one must ensure certain factors in deciding who should hold such a position. Such a person should be organized, and have a good understanding of the job, business climate, and the internal workings of the company. They must possess a deep understanding of the legal system as it affects companies in Nigeria, excellent communication and interpersonal skills, knowledge of regulatory and compliance issues, management and organizational skills, analytical and problem-solving skills, and the ability to detect signs that may lead to problems which may then affect the company’s growth and operations.
In conclusion, the in-depth study and analysis of the importance of the roles and responsibilities of a Company Secretary in this article would establish a clear point, that the part played by this officer is of utmost importance for the governance of the company and its organizational success.
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