Key functions of the corporate secretary, and why the role is more important than ever

The word ‘secretary’ is sometimes misinterpreted in this context to mean a role that engages in mundane or low-risk administrative duties. In fact, a corporate secretary has many duties critical to protecting a company and helping it achieve its strategic goals.

Company secretary services (sometimes abbreviated as cosec) include a variety of tasks that can be time consuming and carry considerable risk for a global group. Depending on the size of the organisation, the function may refer to an individual who is usually a member of the senior team and often legally qualified, such as a general counsel. 

Otherwise, the company secretary function may be carried out by a general counsel-led legal team or by a separate company secretariat. For some smaller businesses, the role title may be taken by the CFO, who will delegate or outsource the relevant statutory functions.

Whoever takes on the corporate secretary role should of course be aware of its many responsibilities. Here are some typical duties a company secretary may perform:

• Maintaining the company’s statutory books and records
• Filing certain statutory returns
• Ensuring that subsidiary entity governance is maintained in good standing in all jurisdictions
• Overseeing board and shareholder proceedings as mandated by each entity’s constitution and local bylaws
• Filing relevant paperwork in a timely manner to effect changes in board and shareholder structures
• Drafting and coordinating relevant statutory reports
• Coordinating annual general meetings

Rules vary by country, and even within a single jurisdiction there may be different rules based on company type. Hong Kong for example requires a company secretary, while the United Kingdom and Australia require public companies to appoint a corporate secretary, but the role is optional for private companies. It is important to note that in the majority of cases, the company secretary is held to be an officer of the company. Notably, this is the case for companies listed on global stock exchanges.

Even without appointing a corporate secretary, the duties must still be carried out, observes 

In many cases — including during periods of cross-border expansion and rapid growth — company secretarial duties can become administratively burdensome for a company, even overwhelming. A company may decide to hire an outside expert to take on the role of company secretary in one or more jurisdictions.

For example, a US company expanding into Hong Kong may hire a third-party provider of corporate secretarial services. At the beginning of the engagement, the client will receive a calendar of deadlines and timetables for the entire year. Edmond Chiu, head of corporate services in Hong Kong, explains. “We keep our clients on schedule by liaising with local agents to ensure they have the correct documents submitted on time so the company is always in good standing.”

For businesses with subsidiary entities in multiple countries, keeping abreast of legal and regulatory obligations has become remarkably challenging. A good company secretarial services provider introduces sound governance procedures and risk controls within the global business. The provider should also keep abreast of regulatory change in each jurisdiction and maintain a regular reporting convention. These services add immediate value to a business by reducing its risk and protecting its reputation.

Keri Wong, associate director for corporate services in Hong Kong, says clients are often bewildered by the types of documents they need to operate in multiple countries. “We have to be one step ahead of them and anticipate regional differences they might not expect.” 

For example, Chinese names can be confusing for Westerners, so an experienced provider will know to look for common mistakes, such as clients inadvertently confusing first and last names. They may also not understand which countries require a wet signature on certain documents or when documents need to be notarised and apostilled.

Chiu stresses the importance of finding a single provider over managing multiple vendors. “Vetting, maintaining and communicating with multiple local company secretary relationships can cause major pain points and require an undue amount of time,” he says. “There is increasing demand from clients seeking to streamline operations with a single point of contact who can communicate with the client in their same language and time zone.”

Keeping abreast of regulatory trends, along with customer and investor demands, can also be part of the role of company secretary, in part so they can help their organisation proactively manage strategy. Environmental, social and governance (ESG) is an increasingly prominent strategic and regulatory concern for multinationals.

One important regulatory trend involves increased demands for disclosure of ultimate beneficial owner (UBO) information, which clearly identifies who ultimately benefits from a company’s dealings financially. Adequate documentation ensures a UBO isn’t hidden by corporate infrastructure, and there is greater focus on the need to explain if and how a company’s ownership has changed, along with other details local authorities should know about a client’s operation in their country. 

This is part of an overall trend toward increased regulation. In the European Union, Asia and other parts of the world, jurisdictions continue to prioritise getting more information. In particular, they’re scrutinising how organisations are approaching data protection and cybersecurity. The ability to demonstrate and report on adequate safeguards in these areas can significantly affect a company’s value.

Some trends are more subtle. For example, many companies are being more forward-thinking about what information to include in the strategic report section of their annual reports. Striking an appropriate balance in this area can be tricky,  a corporate secretary must provide sufficient detail to reassure shareholders and the public at large without divulging too much information to competitors.

This is an excellent example of how the role of company secretary is evolving and becoming more important to virtually all organisations. Fulfilling day-to-day obligations such as board meeting minutes is still essential, but today’s corporate secretary understands local and global regulatory and economic trends, and how to incorporate those trends when developing and implementing corporate strategies.