What Does A Company Secretary Do?
A company secretary is arguably the backbone of a business and play a huge role in the way a business operates. Find out more here.
Most of us are familiar with the term ‘secretary’ and that this person is part of a company. But what’s their role exactly? A company secretary’s role has become more and more important over the last century since the 1990s. We’ve shifted away from the traditional responsibilities that involved taking minutes and correspondence. The responsibility now extends to administering the affairs of the whole company and even managing the board’s business. Keep reading, as we break down what a modern company secretary does behind the scenes of a business.
What are the Legal Requirements?
According to the Corporations Act 2001 (Cth), directors of a company are responsible for appointing a secretary. When appointing the right person for the role, they must ensure that they’re at least 18 years of age. If a company chooses to appoint one secretary, it’s a legal requirement that the person is an Australian resident. However, if they decide to appoint two secretaries to the company, then at least one of the two must reside within Australia according to the law. Before appointment, they must consent in writing to hold the position and the Australian Securities and Investments Commission (ASIC) must be notified of who the secretary or secretaries are following this. To summarise:
- A public company must have a company secretary: at least one person who resides in Australia must be appointed according to Section 204A(2) of the Corporations Act 2001 (Cth). Note that this doesn’t apply to proprietary companies (private companies), although if they choose to have one they must follow the rules.
- Only ‘natural persons’ 18 years or over can be a company secretary and disqualified people can’t. This refers to persons banned from managing a company under the Act.
- Directors are responsible for appointing the company secretary (under Section 204D of the Corporations Act). They’re responsible for setting out the terms and conditions of office and remuneration under 204F.
- Notification and consent must be given: ASIC must be notified within 28 days of the appointment and consent must be given by the intending secretary before being formally appointed to the role. If a company fails to get consent or keep the consent, it’s an offence under section 204C(3) of the Corporations Act.
Role of the Modern Company Secretary
As we mentioned briefly at the beginning, the company secretary’s role has significantly transformed. They’re now considered an ‘officer’ of a company, under section 9 of the Corporations Act. So, to clarify, they have a lot of the same duties and obligations to an organisation that directors have. This has resulted from the increase in the volume of work and skills needed to support a business. But what separates the role from being a director precisely, is the focus on governance. Modern company secretaries provide advice to the company, and promote and instruct good governance practices.
They play an important role in supporting the business board, by ensuring that certain policies and procedures are followed. Coordinating the board’s agenda and briefing materials also form part of their role within the company. All directors should be able to access the company secretary. The accountability of a company secretary is subject to the board and chairman on all matters relating to a company’s governance. Likewise, appointing and removing a company secretary is a board decision under law.
Typical Duties of a Company Secretary
- Manages the operations of the board, such as circulating agendas, committee papers, drafting minutes, discussion papers and proposals;
- Organises meetings between directors and members;
- Makes sure that meetings align with the company’s constitution;
- Maintains or updates the financial records of the company;
- Ensures that the company isn’t doing anything illegal, for example, they’re not doing going against their obligations to the law and ASIC;
- Provides advice on the law, company constitution, Australian Securities Exchange (ASX) and other regulatory matters; and
- Communicates and ensures that members comply with the business’ policies, processes and procedures.
Are there Specific Qualifications a Company Secretary Must Have?
If you’re looking to become a company secretary you should probably keep the following in mind. A modern company secretary will usually hold a bachelor’s degree, with it being such a high up position in a company. Relevant degrees to the role would be in business, law or finance. But is a degree a must-have requirement to become a secretary? Not necessarily. It’s preferred, but you can find out more information about how to undertake the relevant training and education here.
To wrap up our discussion on the multi-faceted role of a modern company, it’s undeniable how big their role within a company is. Not just anybody can fill the role because of the many legal duties and obligations that come with it. Company secretaries are the backbone of a public company and do a lot of the behind the scenes work that we don’t often realise. If you would like further advice on appointing a company secretary or updating your business constitution, don’t hesitate to contact a Lawpath consultant today.
Mia is a Legal Tech Intern at Lawpath. She is in her Final Year of a Bachelor of Arts and Bachelor of Laws degree majoring in International Law & Global Governance. She is interested in international relations, governance, criminal law and how technology is revolutionising the legal industry.