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What’s the Difference Between a Company Director and a Company Secretary?

What’s the Difference Between a Company Director and a Company Secretary?

Recently, there has been a growth in the importance of a company secretary. This has led to confusion as to what the difference between what a company director and secretary is. Read more to find out what this difference is.

23rd August 2019

In the last couple of years, there has been a focus on improving company governance. It’s no longer realistic for one director to be in charge of a large company. Especially, where it is now the norm for directors to hold other business positions, company secretaries are a good option for maintaining administration of a company. Due to this, the role of the company secretary has grown in importance. This has led to confusion between what the actual difference between a company director and secretary is.  

What does a Company Director do?

In short, the role of a director is to make sure the company is operating at its best. A director must take responsibility for their company, and take the initiative to actively be involved within the company. The Corporations Act 2001 (Cth) states that directors must fulfill their duties with:

  • Care and diligence,
  • The best interests of the corporation in mind, and
  • Properly use the information and power that comes with the position

Who can be a director?

  1. A director needs to be at least 18 years old
  2. They must live and conduct business in Australia if they are the only director.

What does a Company Secretary do?

Essentially, a company secretary is there to help make sure the company is complying with the law. They are specifically in charge of making sure the company is complying with statutory and regulatory policies. They also organise company meetings and give notice to all relevant parties, including shareholders and directors. It’s also important to remember that a company secretary is not required by law, but in larger companies, is highly recommended. This is because if you fail to catch a legal document that doesn’t comply with the law, it will result in consequences from ASIC.

The company secretary roles also includes:

  • Advising board of directors on legal rules
  • Monitoring that company rules are followed
  • Coordinating dispatch of board and committee papers
  • Keeping track of minutes for meetings

If your company fails to comply, it will breach the Corporations Act 2001 (Cth) and result in hefty fines. Furthermore, a company secretary can be held personally accountable if they breach laws, in the same way that directors are. A company secretary does not require any formal qualifications. However, in larger companies, they are usually expected to be a qualified accountant or lawyer.

Who can be a Company Secretary?

  1. A company secretary must be at least 18 years old
  2. Personally chosen by the company director(s)
  3. If there is only one company secretary, they must live in Australia.

Conclusion

There are a lot of similarities between the roles of a company director and secretary. However, the fundamental difference is that a director is ultimately responsible for the company complying with all relevant laws. A secretary is in charge of helping the director do this, by assisting in administrative roles. It is highly advised for a large proprietary or public company to have a company secretary. If not, there is a high risk that a company will breach corporation laws. If you have any further questions, you can talk to a company lawyer.

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Author
Natalie Ho

Natalie Ho is a legal tech intern at Lawpath, working as part of the Content Team. She is in her 2nd year at Macquarie University studying a double degree of Science and Law and is highly passionate about the accessibility of law.