In today’s complex business environment, effective risk management is paramount for the sustainability of any organisation. The role of the company secretary is not only administrative but also pivotal in navigating the intricacies of corporate governance, particularly in managing risk.

The Statutory Framework

• Companies Act

Under Sections 88(1) and (2) of the Companies Act 71 of 2008 (as amended) (“the Companies Act”), the role of a company secretary is crucial to the governance and administrative framework of a company. The company secretary is tasked with guiding the board on its duties, responsibilities, and powers, ensuring that the board operates in compliance with all applicable laws and regulations. This involves keeping abreast of legislative updates and ensuring that the company fulfils its legal obligations, such as submitting required documents to regulatory authorities.

The company secretary also coordinates shareholder, board, and board committee meetings, which include preparing agendas and documenting minutes. These tasks are essential for maintaining accountability and providing a clear record of board discussions and decisions. Additionally, the company secretary assists in the development and implementation of corporate governance policies, establishing a framework that supports ethical and effective decision-making within the organisation. Serving as a communication link between the board and shareholders, the company secretary ensures transparency and fosters trust and engagement among stakeholders.

In the context of risk management, these duties significantly contribute to the oversight and mitigation of risks. By ensuring compliance with legal frameworks, the company secretary helps mitigate potential legal and financial risks. Their advisory role in governance practices establishes a robust framework for risk oversight, and effective communication ensures that potential risks are identified and managed promptly. Furthermore, involvement in policy development supports the integration of risk management into the company’s culture and operations.

• King IV

The King IV Report on Corporate Governance, 2016 (“King IV”), through Principles 11 and 5, further enhances the role of the company secretary in overseeing risk management processes. 

Principle 11 emphasizes the importance of risk governance, advocating for the board to govern risk in a manner that supports the organisation’s strategic objectives. The company secretary facilitates this by ensuring that the board is well-informed about the risk landscape and that structured processes are in place for identifying, assessing, and managing risks.

Principle 5 highlights the need for ethical leadership and the establishment of an ethical culture within the organisation. The company secretary contributes to this by supporting the development and implementation of governance policies that promote ethical behaviour and transparency. This ethical foundation is critical for establishing trust and credibility, which are essential for effective risk management.

Other Risk Management Responsibilities

Beyond statutory and best practice recommendations, the company secretary often undertakes additional risk management responsibilities, such as fostering a risk-aware culture within the organisation. This involves organising training sessions and developing policies that encourage proactive risk identification and management.

The company secretary also liaises with external auditors and advisors to ensure that the company’s risk management processes are robust and aligned with international best practices. This external collaboration is crucial in identifying emerging risks and ensuring that the company is prepared to address them.

Furthermore, the company secretary plays a vital role in risk management by ensuring governance compliance, facilitating stakeholder communication, and evaluating board performance. They develop governance frameworks and training programs to enhance understanding of risks, manage compliance with legal requirements, and provide expert advisory support. Additionally, they ensure timely distribution of meeting materials and maintain accurate records to support accountability and effective decision-making.

 Conclusion

The role of the company secretary is indispensable in risk management. By ensuring compliance, fostering good governance, and facilitating effective communication, the company secretary helps safeguard the company against potential risks.

At Rasiluma TD Attorneys Inc., we are committed to supporting businesses in optimizing their governance structures and managing risks effectively. Our team of legal experts is ready to assist you in enhancing your governance framework. Contact us today to learn how we can help your organisation navigate the complexities of corporate governance.