Company secretaries have traditionally kept minutes and done administrative duties. However, their legal responsibilities vary between each company and they have generally increased over the past few decades. With increased pressure on companies to abide by regulations, the role of a secretary has never been more important.
How Can Someone Be a Secretary?
A director must be at least 18 years old, and this age limit similarly applies to a secretary. Someone can be both director and secretary of a company. Conversely, a person disqualified from managing a company may not be appointed as a company secretary, unless approved by ASIC or the Court. For a person to become a secretary, they must give their signed consent before being appointed. This signed consent must be kept by the company and failure to do so is an offence under the Corporations Act. You can create one online using one of our templates here.
There are no particular qualifications or experience a secretary must have. However, given their roles, which often involves ensuring a company is abiding to statutory obligations, it’s advantageous for a secretary to have a legal background. If companies prefer their secretary to have a formal qualification, then the Governance Institute of Australia (GIA) offers a Graduate Diploma in Applied Corporate Governance.
Under the Corporations Act 2001, the directors determine the terms, conditions & remuneration of the secretary. Once a secretary is appointed, ASIC must be notified within 28 days.
Different Company Types = Different Secretary Roles
A company can be a public, private or ASX listed company. Different sizes and types have different stakeholders. Therefore, the duties of a secretary may vary depending on a company. However, company secretaries legally fall under the definition of “officer”, so many legal duties and obligations of directors overlap with secretaries. Some examples are:
- To exercise their powers and discharge their duties with care and diligence
- To exercise their powers and discharge their duties in good faith and for a proper purpose
- Not to improperly use information obtained by virtue of their position
Secretaries do, however, have responsibilities specific to them that are listed under section 188 of the Act. It mainly outlines the information they’re required to communicate to ASIC, such as changes to the share structure and financial reports. They also manage board processes, record meetings and ensure the company complies with statutory obligations. However, depending on the company type, a secretary may not even be legally required.
A public company must have a company secretary, and at least one of the secretaries must ordinarily reside in Australia. For public companies, the experience and qualifications of each secretary must be disclosed in the annual report.
Private/ Proprietary Company
It is not compulsory for a proprietary company to appoint a company secretary. However, if it does have one or more secretaries, at least one of the secretaries must ordinarily reside in Australia. If the company chooses not to appoint a secretary, each director will have these added responsibilities.
The ASX Corporate Governance Principles and Recommendations states the company secretary of a listed entity plays an important role in supporting the effectiveness of the board and its committees.
The role of the company secretary should include:
- Advising the board and its committees on governance matters
- Coordinating the timely completion and despatch of board and committee papers
- Helping to organise and facilitate the induction and professional development of directors.
Directors and secretaries should be able to communicate directly to each other, making these roles easier to fulfil. Read here to learn more about the duties of other directors & officers.
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