The importance of effective corporate governance continues to be a critical element in today’s economic environment and business environment, as we continue to move forward and learn from the mistakes of the past as highlighted in the most recent global financial crisis. As a result we are seeing an increased focus on the role of the company secretary in Ireland. Under the current provisions of the Companies Acts 1963-2015 – every company is legally required to have a Company Secretary appointed to be an “officer” of the company. Their role also involves being the communicator, the facilitator and the legal advisor to the board or to the companies’ shareholders. This specialised role of the modern company secretary has emerged, and continues to emerge, as one of the key governance professionals within the organisation.
Role & Responsibilities
Some of the main duties of a Company Secretary is to maintain the company accounts, file annual returns and to carry out the responsibilities from the articles of association. They also need to keep up to date and undergo continuous interaction with the relevant regulatory authorities for example the Companies Registration Office (The CRO) and the Revenue Commissioners.
A Company Secretary can have administrative duties which include the following:
- Keeping minutes of general and board meetings
- Maintaining the company registers
- Filing documents with the Companies Registration Office within the specified time frame
- Communicating with all members of the company
- Providing administrative and legal support to directors
- Administering share transfers
- Ensuring the company letterhead has the correct details
A Company Secretary needs to be a quick thinker as they are expected to provide advice and the current legislation independently to the directors, shareholders and all relevant third parties. One of their duties is to ensure that the company is compliant with such regulations and ensure their directors and shareholders are kept up to speed with these regulations and acting within the guidelines.
There are also a number of statutory duties set out by the Companies Act that Company Secretaries manage:
- Signing the annual return
- Certifying financial statements attached to the annual return
- Creating a statement of affairs in a winding up or receivership
- Signing relevant application / statutory declaration when re-registering a company as a different type of company
- Creating a statutory declaration required for a public limited company before it may carry on business
An interesting point in relation to these duties is that there is no legal requirement for a person acting as Company Secretary in Ireland, to have acquired professional qualifications or in fact have any previous experience. This would obviously be focused on companies of smaller scale.
However there are legal obligations in place for the employment of a Company Secretary within a publicly traded company. It is fundamental for the secretary to demonstrate to their directors that they hold a great knowledge and have the ability to meet all of the requirements of the role.
S/he may be qualified by way of membership of the Institute of Chartered Secretaries and Administrators (ICSA), this is the qualification purposely offered to Company Secretaries. Chartered Secretaries work as Chairs, Chief Executives and non-Executive Directors, along with Executives and Company Secretaries.
The Future of Company Secretaries
The Cadbury Report (1992) stressed the significance of the role of the Company Secretary:
‘‘The Company Secretary has a key role to play in ensuring that board procedures are both followed and regularly reviewed. The chairman and the board will look to the Company Secretary for guidance on what their responsibilities are under the rules and regulations to which they are subject and on how these responsibilities should be discharged. All directors should have access to the advice and services of the Company Secretary and should recognise that the chairman is entitled to strong support from the Company Secretary in ensuring the effective functioning of the board.’’
As Corporate Governance has become a popular topic among companies within the past number of years – it is no wonder that business’ are focusing on this area – along with compliance – to ensure their business is run to the best of its ability. Failing to acknowledge the current law and regulations can end up in detrimental consequences, which could result in financial penalties along with a negative impact on the company’s reputation.
Given this, the role of the Company Secretary of Irish companies has grown in importance. And a Company Secretary is now seen as the guardian of the company’s proper compliance with both the law and best practice.
