Responsibilities & duties of Company Secretary
1. Maintaining the statutory registers – members, directors and secretaries and directors’ interests
2. Ensuring that statutory forms are filed promptly
3. Sending the Registrar copies of resolutions and agreements
4. The main duty of the Company Secretary is to safeguard and protect such interests of the company at all levels viz. legal, statutory, administrative, arbitration and in other policy matter
5. If authorized by the Board, it is duty of the secretary to convene a Board or Shareholders meeting in time, sign notices of such meeting, send annual and, half-yearly accounts to shareholders, prepare minutes of the meeting time and correctly, make sure that the quorum requisite is present in the meeting, etc.
6. It is the company secretary’s duty to oversee before the execution that the various agreements, deeds, contracts are properly framed, worded, etc.
7. Sometimes a company secretary has to work as a public relations officer of the company etc.
The three main areas, a Company Secretary has the role to play biz. to the Board, to the Company and to the Shareholder. Within each, the Company Secretary’s role can be very diverse.
To the Board
A Company Secretary must ensure that the procedure for the appointment of directors is properly carried out and assist in the proper induction of directors, including assessing the specific training needs of directors/executive management. Secretary needs also to be available to provide comprehensive practical support and guidance to directors both as individuals and as a collective with particular emphasis on supporting non- executive directors. He/she should also facilitate the acquisition of information by all board and committee members so that they can make the best use of their ability to have board meetings, discussions, etc. Further to these tasks, he/she needs to assist in the compilation of board papers and to filter them to ensure compliance with the required standards of good governance. It may also be part of the Company Secretary’s role to raise matters which may warrant the attention of the board.
To the Company
Secretary ensures compliance with all relevant statutory and regulatory requirements and that due regard is paid to the specific business interests of the company, for example, a manufacturing company may require a different approach from that of a bank or a financial services company or from that of a charitable company. Secretary also needs to assist in the implementation of corporate strategies by ensuring that the board’s decisions and instructions are appropriately carried out and communicated. Further to this, he/she should be available to provide a central source of guidance and advice within the company on matters of business ethics and good governance.
To the Shareholder
The Company Secretary needs to communicate with the shareholders as appropriate and to ensure that due regard is paid to their interests. He/she also need to act as a primary point of contact for institutional and other shareholders, especially with regard to matters of Corporate Governance.
Duties as administrative officer
The Companies Act of 1994 imposes numerous obligations on companies with respect to the conduct of their affairs. As a company officer, the Company Secretary can be prosecuted for most of these crimes. The responsibility for ensuring compliance with these matters rests ultimately with the directors.
However, by holding the Company Secretary accountable, the Law not only recognizes that directors usually trust the Company Secretary in this regard, but also provides a strong indication that they should hold the Company Secretary accountable (or get involved in) these matters. This is reinforced in the case of public companies by the requirement that directors designate as Secretary of the Company someone they believe is capable of performing the functions.
In fact, a director will often escape personal responsibility if he can demonstrate that the violation was not caused by his own acts or omissions and that the board appointed a duly qualified Secretary of the Company with responsibility for these matters. It is clear that, in view of their possible responsibilities, Company Secretaries should not close their eyes to cases of non-compliance, even if the directors have sought to hold another person responsible for those matters.
The company secretary must bring such cases to the attention of the directors and advise on the duties and obligations of the company. Therefore, it can be argued that the Secretary of the Company has the duty as an officer of the company to monitor these matters, regardless of the terms of his employment control. Collegiate secretaries must also ensure that when certain of their responsibilities are delegated, such tasks are properly executed, as they can still be held accountable for any breach of the company. The fiduciary duties of directors may also apply to executives who hold senior management positions in the company and authorized to act on their behalf.
This generally includes the Company Secretary who, on any occasion, as a company official has the following fundamental functions:
• act in good faith in the interests of the company,
• do not act for any collateral purpose
• to avoid conflicts of interest
• not obtain secret business profits for or on behalf of the company.
Central duties of the company secretary
The duties mentioned below include both the duties that are legal obligations and those that result from best practices. In addition, a Secretary may have to use his ingenuity to ensure that all central duties are fulfilled.
1. Board of Directors Meetings
Facilitate the proper functioning of the company’s formal decision-making and reporting machinery; organize board meetings and board committees (for example, audit, remuneration, nominating committees, etc.);
formulate meeting agendas with the President and / or the Managing Director / The Executive Director and advise management; collect, organize and distribute such information, documents or other documents necessary for the meeting; ensuring that all meetings are Minuted and that the minutes books are kept with certified copies of the minutes and that all board committees are properly constituted and provide clear terms of reference.
2. General meetings
Ensure that an annual general meeting is held in accordance with the requirements of the Company Law and the Company Statutes; prepare and issue meeting notices, and distribute representation forms; trying to prepare directors for any questions from shareholders and helping them create informational materials; monitor preparations for security arrangements; ensuring that representation forms are processed correctly at the meeting and that voting is carried out accurately.
3. Memorandum and articles of association
The Company Secretary must ensure that the company complies with its Memorandum and Articles of Association and drafting and incorporating amendments in accordance with the correct procedures.
4. Stock exchange requirements
Maintain, supervise and guarantee compliance while negotiating the values of the company, as appropriate, managing relations with the Stock Exchange through the brokers of the company; release information to the market; guarantee the security of price-sensitive unpublished information; Make requests for the listing of additional securities issues.
Following statutory registers has to be maintained:
6. Statistical Books
A Secretary has also to maintain the following statistical books:
7. Statutory Returns
There are requirements to file periodic statutory returns and to report certain changes regarding the company with the Registrar of Joint Stock Companies and Firms, which are:1. Annual returns (Schedule X), within 21 days of general meeting 2. Filing of accounts, within 30 days of the general meeting with the annual return 3. Return of Allotment (Form XV), within 60 days of allotment 4. Amended Memorandum and Articles of Association 5. Notices of appointment, removal, and resignation of directors (Form XII), within 14 days of any change in the structure of directorship 6. Consent of Directors to act (Form IX),7. List of persons consenting to be Directors 8. Agreement to take qualification shares in a proposed company (Form XI) 9. Notices of appointment, removal or resignation of auditors 10. Change of registered office (Form VI), within 28 days of incorporation or of any change thereon 11. Special resolution (Form XIII) within 15 days of passing resolution thereof 12. Increase of Authorized Capital (form IV), within 15 days of passing resolution thereof, etc.
8. Report and Accounts
A Company Secretary has also to co-coordinate the publication and distribution of the company’s annual report, accounts, and interim statements, in consultation with the company’s internal and external advisers, in particular, when preparing the directors’ report.
9. Registration of Shares
He/she has to maintain the company’s register of members; dealing with transfers and other matters affecting shareholdings; dealing with queries and requests from shareholders and different stakeholders.
10. Communications to and from Shareholder
Communicating with the shareholders (e.g. through circulars); arranging payment of dividends, interest; issuing documentation regarding rights issues and capitalization issues; maintaining good shareholder relations; maintaining good relations with institutional shareholders and their investment committees.
11. Shareholder Monitoring
Monitoring movements on the register of members to identify any apparent ‘stake-building’ in the company’s shares by potential take-over bidders; making appropriate inquiries of members as to beneficial ownership of holdings. Etc.
12. Issues of Share and Capital and Restructuring
Implementing properly authorized changes in the structure of the company’s share and loan capital; devising, implementing and administering directors’ and employees’ share participation schemes.
13. Acquisitions, Disposals, and Mergers
Participating as a key member of the company team established to implement corporate acquisitions, disposals and mergers; protecting the company’s interests by ensuring the effectiveness of all documentation; ensuring that due diligence disclosures enable proper commercial evaluation prior to completion of a transaction; ensuring that the correct authority is in place to allow timely execution of documentation.
14. Corporate Governance
Good corporate governance is the much talked and burning issue in the corporate sector all over the world. As a Company Secretary, he/she has to review continually developments in corporate governance; facilitating the proper induction of directors into their role; advising and assisting the directors with respect to their duties and responsibilities, in particular compliance with company law and, if applicable, Stock Exchange requirements; counseling them when preparing presentations and memorandum.
15. Non-Executive Directors
The Company Secretary acts as a channel of communication and information for non-executive directors.
16. Common Seal of the Company
Company Secretary ensures the safe custody and proper use of company seals.
17. Identity of the Company
Ensuring that all business letters, notices and other official publications of the company show the name of the company and any other information as required by the statutes and that company nameplates are displayed in a conspicuous place of registered address of the company.
18. Subsidiary Companies
Ensuring that procedures are in place for the correct administration of subsidiary companies and that correct information is given to the holding company; maintaining a record of the group’s structure. Etc.
The duties which a Secretary commonly undertakes in areas such as accounting, property, labor relations, public relations, personnel welfare and facilities (union, training, medical, accommodation, etc.) i.e. general administration and other subsidiary duties cannot be considered to be core duties. These duties will frequently take up a substantial proportion of the Company Secretary’s time and their importance should not be underestimated. The professional background, previous work experience and general personal capabilities of the Company Secretary will generally dictate the nature and scope of these additional responsibilities.
For example, a lawyer is more likely to specialize in litigation and an accountant is more likely to manage a treasury function. A Chartered Secretary, being specifically trained for the role, is more likely to take on additional responsibilities such as assets management, the welfare of staff/workers, medical, Intellectual property, contracts, negotiation, litigation, contract drafting, Conveyancing, consumer credit contract, Accounting/Finance, Payroll, Financial management,
Credit control, Taxation, Financial Accounting, Project finance, internal control
system, Corporate finance, Employee and executive Profit share schemes, Other employee benefits, Performance appraisal, Risk management, Office administration, Management Information system, General Management Strategic planning, Corporate planning Liaising with professional advisers for Directorship in group subsidiaries. Etc. Most Company Secretaries could probably add to the above list, particularly where their company’s business in Malaysia is subject to further specific external regulation.
The Company Secretary can authenticate documents or proceedings of the company and the signature of the Secretary on a written resolution is evidence of the proceedings. The Companies Act 1985 provides that a document signed by a director and the Secretary of a company and expressed (in whatever form of words) to be executed by the company has the same effect as if executed under the common seal of the company. If the office of Secretary is vacant, or the Secretary is incapable of carrying out his/her duties, the assistant or deputy secretary shall carry out the functions of the Secretary and the document is deemed to be executed by the company.
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