Company secretary
Encyclopedia
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.
The Company Secretary is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the Board of Directors are implemented.
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 shareholder
s, to ensure that dividend
s 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.
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 pension
s 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 formalised, with a title such as Chief Governance Officer added to their existing title.
In view of the important roles the company secretary plays in business, PLC
s and large companies require the company secretary to be suitably trained, experienced and professionally qualified for these responsibilities.
In the UK, 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'.
In India, the Institute of Company Secretaries of India (ICSI) regulates the profession of Company secretaries. ICSI is a statutory professional body which has more than 29,010 associate members.
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.
Chartered Secretaries are the sixth highest paid employees in the UK according to the Office for National Statistics Annual Survey of Hours and Earnings (March 2010).
Many corporate secretaries of North American public companies are lawyers and some serve as their corporation's general counsel
. While this can be helpful in the execution of their duties it can also create ambiguity as to what is legal advice, protected by privilege, and what is business advice.
state otherwise. If a private company doesn’t have a company secretary then the duties that would otherwise have belonged to the company secretary will fall on the directors of the company. A public company in the UK must still have a formally appointed company secretary.
The exact responsibilities of the company secretary depend on the size and nature of the company and there is no statutory definition of what these are, but it generally includes some or all of the following:
s) or more is required to appoint a qualified person as Company Secretary. A qualified Company Secretary should be a member of Institute of Company Secretaries of India. A company having not less than Rs.one million (10 lac
s) paid up capital and not required to appoint a full time company Secretary should file a compliance certificate signed by a practicing Company Secretary with Registrar of Companies.
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.50 million (5 crore
s). If the capital is less than Rs.50 million (5 crore
s), 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.
The annual returns of companies listed on recognized stock exchanges 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.
When the Companies Bill, 2009 is passed by the parliament and becomes an Act, the National Company Law Tribunal(NCLT) will be given powers of a court and all matters relating to Company Law would be heard before it instead of High Court. Only a Company Secretary would be eligible to appear before NCLT and not a lawyer. This will open more opportunities for a Company Secretary.
ə NKS & Company, Company Secretaries, India -{www.csnitesh.com}
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...
or public organisation, normally in the form of a managerial position or above. In the United States it is known as a corporate secretary.
The Company Secretary is responsible for the efficient administration of a company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the Board of Directors are implemented.
Despite the name, the role is not a clerical or secretarial
Secretary
A secretary, or administrative assistant, is a person whose work consists of supporting management, including executives, using a variety of project management, communication & organizational skills. These functions may be entirely carried out to assist one other employee or may be for the benefit...
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 shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
s, to ensure that dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
s 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.
Roles and responsibilities
TheCompany 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 pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
s and employee share schemes, insurance administration and organisation, the negotiation of contracts, risk management
Risk management
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...
, 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 formalised, with a title such as Chief Governance Officer added to their existing title.
In view of the important roles the company secretary plays in business, PLC
Public limited company
A public limited company is a limited liability company that sells shares to the public in United Kingdom company law, in the Republic of Ireland and Commonwealth jurisdictions....
s and large companies require the company secretary to be suitably trained, experienced and professionally qualified for these responsibilities.
In the UK, the company secretary may be qualified by virtue of examination and membership of the Institute of Chartered Secretaries and Administrators
Institute of Chartered Secretaries and Administrators
The Institute of Chartered Secretaries and Administrators is an international professional membership body and a recognised authority on corporate governance.-History:The organisation was founded in 1891 and incorporated by Royal Charter in 1902...
(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'.
In India, the Institute of Company Secretaries of India (ICSI) regulates the profession of Company secretaries. ICSI is a statutory professional body which has more than 29,010 associate members.
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.
Chartered Secretaries are the sixth highest paid employees in the UK according to the Office for National Statistics Annual Survey of Hours and Earnings (March 2010).
Many corporate secretaries of North American public companies are lawyers and some serve as their corporation's general counsel
General Counsel
A general counsel is the chief lawyer of a legal department, usually in a corporation or government department. The term is most used in the United States...
. While this can be helpful in the execution of their duties it can also create ambiguity as to what is legal advice, protected by privilege, and what is business advice.
United Kingdom
Since 6 April 2008 there has been no requirement for a private company in the UK to have a company secretary unless the company’s articles of associationArticles of Association
The Continental Association, often known simply as the "Association", was a system created by the First Continental Congress in 1774 for implementing a trade boycott with Great Britain...
state otherwise. If a private company doesn’t have a company secretary then the duties that would otherwise have belonged to the company secretary will fall on the directors of the company. A public company in the UK must still have a formally appointed company secretary.
The exact responsibilities of the company secretary depend on the size and nature of the company and there is no statutory definition of what these are, but it generally includes some or all of the following:
-
-
- maintaining the company’s statutory registers;
- updating the records held by Companies HouseCompanies HouseCompanies House is the United Kingdom Registrar of Companies and is an Executive Agency of the United Kingdom Government Department for Business, Innovation and Skills . All forms of companies are incorporated and registered with Companies House and file specific details as required by the...
; - maintaining the registered officeRegistered officeRegistered office is a term used to describe the address which is registered with the government registrar as the official address of a company, an association or any other legal entity. Generally it will form part of the public record...
; - managing and storing the company’s records; and
- organising the company’s board meetings and annual general meetingAnnual general meetingAn annual general meeting is a meeting that official bodies, and associations involving the public , are often required by law to hold...
.
-
India
In India every company having a paid up share capital of Rs.50 million (5 croreCrore
A crore is a unit in the Indian number system equal to ten million , or 100 lakhs. It is widely used in India, Bangladesh, Nepal, and Pakistan....
s) or more is required to appoint a qualified person as Company Secretary. A qualified Company Secretary should be a member of Institute of Company Secretaries of India. A company having not less than Rs.one million (10 lac
Lakh
A lakh is a unit in the Indian numbering system equal to one hundred thousand . It is widely used both in official and other contexts in Pakistan, Bangladesh, India, Maldives, Nepal, Sri Lanka, Myanmar and is often used in Indian English.-Usage:...
s) paid up capital and not required to appoint a full time company Secretary should file a compliance certificate signed by a practicing Company Secretary with Registrar of Companies.
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.50 million (5 crore
Crore
A crore is a unit in the Indian number system equal to ten million , or 100 lakhs. It is widely used in India, Bangladesh, Nepal, and Pakistan....
s). If the capital is less than Rs.50 million (5 crore
Crore
A crore is a unit in the Indian number system equal to ten million , or 100 lakhs. It is widely used in India, Bangladesh, Nepal, and Pakistan....
s), 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.
The annual returns of companies listed on recognized stock exchanges 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.
When the Companies Bill, 2009 is passed by the parliament and becomes an Act, the National Company Law Tribunal(NCLT) will be given powers of a court and all matters relating to Company Law would be heard before it instead of High Court. Only a Company Secretary would be eligible to appear before NCLT and not a lawyer. This will open more opportunities for a Company Secretary.
See also
Professional organisations- Australia - Chartered Secretaries Australia (CSA)
- Canada - Chartered Secretaries Canada / Canadian Society of Corporate Secretaries
- Hong Kong - The Hong Kong Institute of Chartered SecretariesThe Hong Kong Institute of Chartered SecretariesChartered Secretaries or Hong Kong Institute of Chartered Secretaries is an independent professional body dedicated to the promotion of its members’ role in the formulation and effective implementation of good governance policies in Hong Kong and throughout China as well as the development of the...
(HKICS) - India CS - Institute of Company Secretaries of IndiaInstitute of Company Secretaries of IndiaThe Institute of Company Secretaries of India is statutory professional body constituted under the Company Secretaries Act, 1980 passed by the Parliament of India. ICSI is the only recognized professional body to develop and regulate the profession of Company Secretaries in India...
(ICSI) - Malaysia - Chartered Secretaries Malaysia (MAICSA)
- New Zealand - Chartered Secretaries New ZealandChartered Secretaries New ZealandChartered Secretaries New Zealand is the New Zealand division of the Institute of Chartered Secretaries and Administrators . ICSA International is an international professional body with 44,000 members worldwide. It was founded in England in 1891 and granted its Royal Charter in 1902...
(CSNZ) - South Africa - Institute of Chartered Secretaries Southern Africa (ICSA)
- Singapore Association of the Institute of Chartered Secretaries and Administrators (SAICSA)
- United Kingdom - Institute of Chartered Secretaries and AdministratorsInstitute of Chartered Secretaries and AdministratorsThe Institute of Chartered Secretaries and Administrators is an international professional membership body and a recognised authority on corporate governance.-History:The organisation was founded in 1891 and incorporated by Royal Charter in 1902...
(ICSA) - United States - The Society of Corporate Secretaries & Governance Professionals
ə NKS & Company, Company Secretaries, India -{www.csnitesh.com}
External links
- Corporate Secretaries International Association
- The Society of Corporate Secretaries & Governance Professionals (North America)
- Chartered Secretaries Canada
- The Hong Kong Institute of Chartered Secretaries
- The Company Secretaries Of India
- The Institute of Chartered Secretaries and Administrators, UK