All companies registered under the provisions of the Companies Acts 1963-2013 are required to have a company secretary.

The Companies Bill 2012, which looks likely to be enacted this year, not only retains that requirement, but goes a step further by placing a new obligation on the directors of private companies to appoint a suitably qualified individual as their company secretary . That obligation was previously only imposed on public companies.

Corporate Governance

The role and responsibilities of the company secretary have evolved over the last number of years. Traditionally the role was seen as purely administrative in nature, but with the increasing emphasis on compliance and corporate governance it has evolved and expanded from being an administrator of the Board to an adviser to the Board.  The Company Secretary is now seen as pivotal to ensuring good governance and the smooth running and operation of the Board.

Board members, and particularly the chairman, look to the company secretary to advise them on effective board practice, their statutory duties and obligations, and corporate governance requirements.

The company secretary works with the Chairman to ensure corporate governance processes are in line with current day practice. They will consider and implement improvements that would strengthen the governance of a company. By employing a strong corporate governance framework, and through careful management of the potential risks, it is hoped that exposure to costly reputational and financial damage can be limited.

Board Support

The company secretary will usually provide support to assist the Board to operate more effectively. This support will often include an active involvement in preparing the agenda of meetings and presenting high quality information and reports in advance of the meeting. This should enable the Board to assimilate information prior to meetings so that they can fully contribute to the debate and discussion at the meeting which results in better, more informed decisions from the Board.

A critical function of the company secretary is their attendance at board meetings and their taking of minutes of the proceedings at board meetings. The importance of clear and accurate minutes of the decisions taken and resolutions passed cannot be over emphasised. It is a critical element of good governance. The transparency of Board decisions and the subsequent actions taken as a result of Board discussions can have far reaching implications if the accuracy and clarity of the minutes are not beyond question.  

General and Administration

A number of duties are imposed on the officers of a company by the Companies Acts but few of these are the secretary’s exclusive responsibility, they tend to be tasks which may be performed by the secretary and directors of the company.  However, depending on the nature and size of the company, a company secretary may have many other general and administrative duties.   

Some of the more important administrative duties undertaken by the company secretary are:

  • Convening board meetings and general meetings;
  • Providing support and guidance to the Chairman;
  • Ensuring compliance with relevant statutory and regulatory requirements;
  • Ensuring that board decisions and resolutions are documented as a correct record through accurate minute taking;
  • Providing comprehensive legal and administrative support and guidance to the board of directors and acting as the "go to" person for matters relating to corporate governance;
  • Maintaining the company’s minute books and statutory registers;
  • Making statutory and other filings to the Companies Registration Office;
  • Administering share transfers and communicating with shareholders; and
  • Publishing notices and ensuring the company letterhead contains the appropriate details.

Due Skill and Care

There is an express duty on each director and the secretary to ensure that their company complies with the Companies Acts. A company secretary is obliged to exercise due care, skill and diligence while performing the duties that can reasonably be expected from a person of their level of knowledge and experience.  A company secretary can be held liable for loss to the company arising from their negligence. Many of the provisions of the Companies Acts stipulate that any officer of the company who is in default shall also be liable to a fine or a penalty. Although the powers of the company secretary are limited to the powers designated by statute or as delegated by the board of directors, the secretary has power to enter into contracts relating to the day-to-day running of the company.

The Companies Acts do not expressly state the duties of a secretary but do impose a number of obligations on officers of a company and penalties for non-compliance. As the main focus of company directors is on the business and operational side of the company, it can be easy for them to overlook their statutory obligations.  Non-compliance with the myriad of statutory and regulatory requirements may have some serious consequences and we see the role of the company secretary being increasingly influential in ensuring this does not happen.

The Companies Bill 2012

The Bill is currently expected to become law before the end of the year and there are many changes proposed which company secretaries should be aware of. The existing private limited company, which constitutes over 90% of the companies incorporated in Ireland, will become, either a company limited by shares (CLS) with a single document constitution or a Designated Activity Company (DAC). As the doctrine of 'ultra vires' will no longer apply to a CLS it will be able to carry on any activity it chooses under a single document constitution and will no longer be restricted by the unwieldy objects clause which company secretaries are all too familiar with. A company wishing to retain its existing constitution will be designated as a DAC. Other changes envisaged are the codification of director’s duties within the Bill, dispensing with AGMs, majority resolutions and the reintroduction of directors' compliance statements for companies over a certain size.

Extended Role brings Real Value

The role and focus of the company secretary is dependent on the type of company and industry in which the company operates. The demands of a small private limited company will differ considerably from a listed public company; yet regardless of the type of company, the role of the company secretary has extended beyond simply ensuring that a company is complying with its statutory requirements. Company secretaries now add real value to the effectiveness of a Board and an organisation by imparting their expertise in corporate governance and organisational skills.

This article first appeared in The Irish Director, Spring 2014.