Board secretary is a person through whom it is possible not only to establish a dialogue but also to increase the professional level of the board management. In this article, we will consider the functions of this position in more detail.
The role of the corporate secretary
In world practice, a corporate secretary is an employee who maintains regular fruitful communication between the owners of a joint-stock company, its top managers, and the board of directors. Developing interaction within the framework of the so-called corporate triangle, he acts as a guarantor of the observance by officials and corporate management bodies of those procedural requirements that ensure the implementation of the legitimate nature and interests of shareholders.
Following good corporate governance standards, the secretary should be accountable to the board of directors. However, in practice, the situation is often different. In many American companies, the corporate secretary reports to senior executives – either the CEO, the general counsel, or the chief financial officer.
This situation is quite natural, because American law allows the combination of two management functions, and in large public companies in the United States, the CEO usually takes the post of chairman of the board of directors. However, it is more effective to establish the accountability of the corporate secretary not to any of the top managers, but the board of directors: this will minimize the risks that may arise in connection with a conflict of interests pursued by shareholders and senior managers.
International practice shows that the specifics of the duties performed by the board secretary are determined by the characteristics of a particular company (its size, industry and regional structures of the business it develops, etc.) and the jurisdiction in which it operates. Let us single out the most important and common functions of a board secretary:
- Preparation and provision of meetings of the board of directors and committees of the board of directors.
- Preparation and provision of general meetings of shareholders.
- Maintaining corporate protocols, ensuring their safety, and access to them in cases provided for by law and internal regulations of the company.
- Provision of professional assistance and advice to members of the board of directors, managers, and shareholders.
- Interaction with regulators, auditors, creditors, and other interested parties;
- Ensuring the provision of timely and reliable information about the company to the company’s bodies and shareholders;
- Storage of company documents, including maintaining the company’s archives.
What does the board secretary do at the board meetings?
The role of the corporate secretary in supporting the effective functioning of the board of directors is very significant. He is responsible for notifying directors of upcoming meetings of the board and its committees, helps formulate the agenda and makes sure that it is logically built and not overloaded, attends the meeting itself, and takes minutes. He also acts as a guarantor of the timely provision of systematized information to all members of the board of directors in the required volume.
Therefore, he is obliged to know about all intra-corporate events, and about changes in legislation that can affect the company’s activities. It is the secretary who ensures that all documents drawn up on the board comply with the requirements of the law.
Performing administrative functions, the secretary helps new directors understand the peculiarities of the corporation’s business and the procedures for the activities of the board and also identifies the need for training, both individual and group.