A company secretary is a senior position in a private sector company or public sector organisation. Despite the name, the role is neither clerical nor secretarial in nature.
A company secretary was held with high regards in the past. He or she was the key officer entrusted to administer and regulate compliance. He also served as an advisor to directors and shareholders of a company. However, the significance of the role has been diminished over the years, due to the general commoditising of the profession and misconceptions held by the public.
Section 171 of the Companies Act cap. 50 states that every company in Singapore must appoint at least one Company Secretary. This goes to show that the appointment of a company secretary is a major decision for any company to make. Not everyone can make the cut. Having said that, many companies still do not fully understand the importance in appointing one.
Here are some of the misconceptions about a company secretary that people generally hold:
- A company secretary is just a documents filer
- A company secretary is just another office administrator
- A company secretary is just a minutes-taker
And the list goes on. In this article, let us correct some of these fallacies to have a better understanding of a company secretary and what he or she does, making the role such an important one.
A Necessary Paradigm Shift
A company secretary’s role is by no means a documents filer, administrative officer, and definitely not a mere minutes-taker. People tend to overlook a company secretary’s effort in making sure that the company remains in compliance with constitutional and relevant regulations. As a company secretary, he also has to make sure that mandatory and critical tasks such as those listed below are properly done:
- Make sure that prospective corporate transactions are in compliance with the company’s constitutional regulations
- Resolutions accurately depict the intricacies of corporate transactions
- ACRA filings are duly done and timely submitted
- Maintaining of statutory registers
The above list is by no means exhaustive. There are many other important tasks a company secretary does that make the role such a critical one. According to the Companies Act, cap. 50, company directors have to make sure that the company secretary is vested with the authority and knowledge to discharge pivotal tasks.
More than One Would Expect
To further elaborate, a company secretary is the person who maintains the register, index, minutes and such other documents required by the Company’s Constitution or by the Companies Act. He is also the person who represents the company to liaise with external authorities such as the Accounting Corporate and Regulatory Authority of Singapore on company’s sensitive or confidential matters.
One of the biggest, unseen and seldom talked about part of a company secretary’s role is being an advisor to the directors and shareholders – this includes ensuring good governance practices and best practices are instituted within the Board and between the Board and the shareholders.
Given the extensive knowledge of regulatory compliance and internal governance of the company, the company secretary is in the position to advise and guide the directors on the development of business strategies and facilitates effective and efficient decision making.
In Singapore, the role of a company secretary is usually undertaken by an in-house legal counsel. This is partly because the skill sets and knowledge of a company secretary is highly specialised.
Alternative to In-house Company Secretary
Companies can engage a competent third-party secretarial services provider to discharge the duties of an in-house company secretary effectively in cases where budget for an extra headcount is an issue and/or in cases where there isn’t a suitable candidate to take up this role.
By outsourcing the function of a company secretary to external experienced professionals, directors can also have the peace of mind to focus on running the business, especially if the company is in industries with unique needs such as a non-profit organisation or a fund company.