As a “polymath,” the company secretary is not only a compliance officer but a strategic advisor, governance expert, and facilitator of the board’s operations. This multifaceted role is crucial in ensuring that a company adheres to the highest governance standards, as outlined in the Companies Act 71 of 2008 (as amended) (“the Companies Act”), the King IV Report on Corporate Governance, 2016 (“King IV”), and other relevant laws.
Legal Framework and Mandate
The Companies Act mandates the appointment of a company secretary for public and state-owned companies. According to Section 88(1) of the Companies Act, the company secretary is accountable to the company’s board, ensuring that the board has access to professional and independent guidance on corporate governance and its legal duties.
Section 88(2) of the Companies Act outlines the specific responsibilities of the company secretary, including (not an exhaustive list):
- Guiding directors on 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 MOI, rules of the company, or the Companies Act.
- Ensuring that the minutes of all shareholder meetings, board, and committee meetings, including those of the audit committee are properly recorded in compliance with this Act.
- Certifying in the company’s annual financial statements (“AFS”) whether the company has filed the relevant statutory returns and notices, and that these returns and notices appear true, correct, and up to date.
- Ensuring that persons entitled to receive a copy of the AFS under this Act, receive them.
- Conducting the functions of a person designated in section 33 (3) of the Act.
King IV emphasizes the role of the company secretary in promoting ethical leadership, corporate citizenship, and stakeholder inclusivity. Specifically, Principle 10 outlines the responsibilities of the company secretary in embedding these principles into the company’s governance framework.
Additionally, other South African legislation supports the appointment and function of a company secretary or similar role. For instance, the Banks Act 94 of 1990 and the Insurance Act 18 of 2017 impose specific governance and compliance requirements. In these instances, the company secretary’s role and responsibilities would be defined by the Companies Act, the best practice recommendations in King IV, and the provisions of the relevant enabling legislation.
Key Responsibilities:
1. Compliance and Legal Obligations: The company secretary ensures that the company adheres to the legal requirements set out in the Companies Act. This includes maintaining statutory books, filing annual returns, and ensuring timely compliance with legal and regulatory requirements.
2. Governance Framework Support: As highlighted in King IV, the company secretary plays a vital role in implementing and maintaining an effective governance framework. This includes advising the board on best practices and ensuring that decisions align with the principles of transparency and accountability.
3. Board Administration: Efficient board operations are crucial for effective governance. The company secretary organizes board meetings, prepares agendas, records minutes, and ensures that directors have all the necessary information to make informed decisions.
4. Liaison Between Stakeholders: Acting as a bridge between the board and various stakeholders, the company secretary facilitates communication, ensuring that stakeholder interests are addressed and aligned with company objectives.
5. Strategic Advisement: Beyond administrative duties, a skilled company secretary provides strategic insights, advising on risk management, corporate strategy, and policy development.
Thriving in the Role: Internal and External Factors
Success as a company secretary depends on both internal and external factors. Internally, it requires a robust knowledge base through continuous professional development, effective communication to build strong stakeholder relationships, proactive engagement to address potential governance issues, and support from the board and management.
Externally, it involves navigating a supportive regulatory environment, particularly in South Africa, and engaging with professional networks to share insights and learn from peers.
By leveraging these factors, a company secretary can effectively fulfil their role, contributing to the company’s long-term sustainability and success.
Conclusion
The company secretary is central to robust corporate governance, ensuring the board’s strategic functions are effectively supported.
For more information on how we can support your governance needs, contact Rasiluma TD Attorneys Inc. today. Let us be your trusted partner in achieving governance excellence.
