There are three consistent factors involved throughout the operations of most boards of directors:
- Institutional investors necessitate increased engagement
- There’s a growing emphasis centered around corporate sustainability
Boards are expected to have a firmer grasp on a broader scope of topics, such as cybersecurity, human capital or company culture
The impact of these various aspects necessitates the need for a corporate secretary industrious and diligent in carrying out their duties.
In the article, we’ll explore the main corporate secretary roles and responsibilities, with examples of best governance practices, and tips for performing tasks efficiently.
What is a corporate secretary?
A corporate secretary, sometimes called a compliance officer, is a senior position in a public or private company responsible for the administrative operations of the board of directors and senior management.
In particular, this board assistant ensures the business adheres to its governing framework, chooses the right stakeholder and shareholder model, and follows all statutory and corporate regulations.
What is the role of a corporate secretary?
The most telling thing about the corporate secretary role’s importance is that corporate laws require organizations to appoint a secretary.
Regarding the very nature of this role, it lies in the following:
- Ensuring the board has the proper advice and resources to carry out fiduciary duties accurately
- Recording minutes of the board’s actions
- Making sure meetings are appropriately documented
Noteworthy is that in recent years the responsibilities of the secretary have increasingly focused on corporate governance, which includes being a trustee for the board of directors, advising on duties and logistics, and maintaining documentation following legal requirements.
We invite you to sort through the corporate secretary duties and responsibilities to get a clear job description of this position.
What does a corporate secretary do?
First, secretaries ensure their company complies with the regulations set by the governing bodies outside the company. This way, the corporate secretary serves as the company’s gatekeeper.
Second, a corporate secretary’s primary duty is to guarantee that a board of directors and top management handle all business matters with transparency, integrity, and accuracy.
Third, this person ensures that the company’s management works effectively and cooperates with stakeholders in good faith.
Corporate secretary responsibilities
Maintaining corporate records, supplying the board with resources, creating meeting minutes, and other matters for the board and its committees. Making sure the company’s governance framework is appropriately developed, established, and maintained, overseeing legal entity management, developing and improving the company’s governance program, conducting training and development of the board, collaborating with executive teams, and bringing new directors onboard to assist the board.
Of the issues that boards need a firm hand on, cybersecurity definitely sheds light on the integral nature of a corporate secretary.
Cybersecurity was initially meant for corporate IT and security reviews. At most, these discussions would be brought forth once per year with an audit committee. In today’s landscape, the board must be honed into cybersecurity—given the growth of risk factors. As such, nowadays, the board must be privy to a steady stream of reports from the CISO.
Furthermore, many boards of directors have begun bringing on cyber experts as well as establishing cybersecurity committees.
Without the corporate secretary, directors can’t keep a firm grasp on these matters.
As such, corporate secretaries have access to an array of opportunities to engage with a growing list of sectors of an organization. This results in an influx of new responsibilities, which helps these individuals grow as leaders within an organization.
So, here’s what duties and responsibilities of a corporate secretary look like today:
1. Maintaining corporate records
Corporate secretaries are responsible for maintaining corporate documents such as disclosure information, compliance with state laws, stockholder correspondence, stock issues, and proxy statements.
2. Supplying the board with resources
When a board, committee, or CEO needs good advice, board materials, or guidance, the corporate secretary is the first person they turn to. If there are no answers or solutions, the secretary must find them.
3. Creating meeting minutes throughout board and committee meetings
Setting the agenda and creating corporate meeting minutes are among the key secretary responsibilities to reflect the board’s fulfillment of its fiduciary responsibilities.
4. Making sure the company’s governance framework is appropriately developed, established, and maintained
The governance framework usually includes the board and board committees. The committees, in turn, encompass the finance, audit, compensation, disclosure and risk management committees.
5. Overseeing legal entity management
The corporate secretary supervises legal entity governance management, ensuring all board members adhere to the regulatory and statutory requirements, company’s articles of association, bylaws, and other founding documents.
6. Developing and improving the company’s governance program
Companies need to ensure that their management programs keep up with market changes. The secretaries are responsible for reviewing and developing these programs and adjusting them to the best governance practices.
7. Conducting training and development of the board directors
Corporate secretaries oversee the administration of board evaluations, conduct corporate governance audits, resolve succession planning issues, and support directors’ education, training, and initiatives.
8. Collaborating with executive teams
Since corporate secretaries are agenda drivers, they must work with directors and the executive committees to prioritize subjects for discussion. Also, this duty covers assisting executives in issuing financial press releases, compiling annual reports, and reviewing insurance policies.
9. Bringing new directors onboard
Per the Harvard Business Review, 32% of executives are unimpressed with their onboarding experience. Poor onboarding leads to higher turnover with executives, which can cost a company up to 213% of a parting executive’s salary. Boards can’t afford to allow their directors to have a bad onboarding experience. New directors aren’t going to turn up 100% prepared and rearing to go right off the bat.
Getting new directors up to snuff requires considerable effort—specifically if it’s their first time on a board. Instead, on top of legal duties and liabilities, fresh members must grasp the gravity of their increased expectations and responsibilities.
Ensuring that the above issues are handled promptly and efficiently falls into the hands of the corporate secretary. They’ll help with providing additional educational opportunities, for instance.
Skills and qualifications of a corporate secretary
Successful corporate secretaries should have finely-honed skills and high qualifications to bring maximum value to the company and its business goals. Here are some of their core skills:
- Integrity skills. The company relies on the secretary as a reliable person who ensures a clear governance structure and adherence to federal laws. Therefore, a secretary’s strengths should be honesty and integrity.
- Organization skills. A good corporate secretary should be adept at coordinating work processes, facilitating board communications, attending board meetings, taking minutes, and record keeping.
- Communication skills. Excellent communication skills are the ability to clearly communicate the directors’ positions in writing and verbally. In addition, it is common for secretaries to conduct shareholder meetings to communicate the directors’ decisions.
- Objectivity skills. The ability to keep an objective perspective is a crucial skill as secretaries are the intermediary between the board of directors and management. This is especially valuable in cases of disagreement and disputes between members.
- Critical-thinking skills. A corporate secretary plays a leading role in developing and implementing practical and generally acceptable solutions. They should operate within the framework of the law and tax implications appropriate to the company.
Corporate secretaries are often business professionals or lawyers who have completed extensive corporate governance training. Also, knowledge of accounting and business administration is essential for the effective fulfillment of the responsibilities of a corporate secretary.
It is noteworthy that sometimes the role of corporate secretary on a board of directors is performed by an expert board member or a corporate attorney because they have in-depth knowledge of state corporation laws and corporate governance.
Main challenges
Due to many board responsibilities, secretaries often find themselves under pressure. As a result, the effective performance of job duties of a corporate secretary may be impaired due to the following complex challenges:
- Managing conflict of interests. A conflict of interest arises when a board member has several interests affecting their actions and voting on the board. Although failing to report a situational conflict may not constitute a criminal offense, it may result in a civil action against the director.
A secretary can meet this challenge by communicating potential conflicts, preparing effective board resolution procedures, and restricting unacceptable forms of private interest. - Handling sensitive information. Each director has a duty of confidentiality to the corporation. However, the secretary should not only comply but also protect the company from data breaches, which is often a real headache.
For exceptional end-to-end protection of confidential information, secretaries benefit from board meeting software, a solution packed with sophisticated bank-grade security mechanisms.
Best practices for corporate secretaries
The ever-changing dynamics in the boardroom force secretaries to seek new knowledge and skills. Here are some of the best practices for secretaries who want to give more to their board members:
- Stay equally close to the CEO and the board chair. After all, you serve not only the executive management, but the entire board.
- Maintain a professional distance from all board members. Be impartial but at the same time trusted by all.
- Contact committee chairs regularly to discuss agendas for the rest of the year. This helps secretaries adapt agendas to changing circumstances.
- Make a move when you think board decisions are poor or have other worries. Talk to the chairman, CEO, or senior independent director.
- Remember that a good secretary is a well-organized secretary. So improve your organizational skills, and soon you will notice that the entire board has become a disciplined team.
The role of corporate secretaries will keep flourishing in the boardroom
Despite the existence of their SEC disclosure and subsidiary management responsibilities, corporate secretaries are primarily focused on board work in today’s climate.
Experts predict that the role will continue to center around the boardroom. When something matters to the CEO, it becomes a top priority of the corporate secretary. And anything board-related concerns the CEO.So, it’s no surprise that corporate secretaries are becoming an increasingly valuable asset in any boardroom.
Key takeaways
- The key, but not all, roles and responsibilities of a corporate secretary cover keeping records, communicating with boards and committees, ensuring compliance, and bringing new directors onboard.
- Ensuring corporate governance and compliance is integral to the secretary’s role since it determines the company’s life from a legal standpoint.
- The position of corporate secretary hides some challenges, but knowing how to approach them can turn challenges into strengths.