Position in the organisation
In order for the company secretary to carry out their duties and responsibilities effectively they need to hold a position of seniority within the organisation
It is debated whether a CS should be a memeber of the executive team, some think this comprises their indpeendnece
Whether or not they are a member of the executive team, they should attend meetings of the executive team. This will enable them to advise the executive on governance issues arising out of any proposals as they are being formulated
CS can also advise on how the board might react to a particular proposal and what questions the executive should be prepared to answer when the proposal is considered by the board
Attending executive meetings also helps the company secretary get an understanding of the executive's positioning and reasons for suggesting the proposal which may help the company secretary if the proposal needs to be sold to the chair
Reporting line
Differs between organisations
Some report direct to the chair, others to the CEO or another senior executive
Whatever reporting line, needs to preserve the independence and integrity of the position
The CS is responsible to the board and should be accountable tot he board through the chair on all matters relating to corporate governance and their duties as an officer of the company
As the person elected by the directors to act as their leader, the chair is the person to whom the company secretary should report with respect to responsibilities which concern the whole board
If in addition to the core duties, the CS has other executive or administrative duties, he should report to the CEO or other such director to whom responsibility for that matter has been delegated by the board
The CS should not report to a director (expect the chair) on any matter unless responsibility for that matter has been delegated to that director by the board
A director who is authorised unilaterally to fix the company's secretary's remuneration and benefits could gain undue influence. It is therefore recommended (particularly where the company secretary reports to the chairman on all matters) that decisions on remuneration and benefits should be taken (or at least noted) by the board as whole or the relevant committee
Remuneration
Decisions on the remuneration and benefits of the company secretary should be taken by the board or by the remuneration committee
This is to protect the independence of the position of the company secretary
Where a company secretary has a reporting line to the CEO or another director, the views of the CEO or other director can be taken into account by the board or remuneration committee when decisions are taken on the remuneration and benefits of the company secretary
Evaluation
It is important for the CS to have an annual evaluation
The CS evaluation is carried out as part of the annual board evaluation. The external evaluator engaged to carry out the evaluation of the board, board committees and individual directors can be requested to also carry out an evaluation of the company secretary
The remuneration committee can request management to carry out an independent 360-degree of the company secretary, the results of which are fed directly back to the committee
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Any recommendations from the evaluation should be reviewed and monitored by the board to ensure they are implemented and that the company secretary receives any training or additional support required to carry out their role more effectively
As part of King III, an evaluation questionnaire template was developed which requires in
Section 1: the company secretary to assess themselves agains the statutory and governance requirements of their role
Section 2: the directors to grade the performance of the company secretary a list of competencies expected of the company secretary
Section 3: requests the board to confirm that all of the organisational formalities relating to the role are in place, such as a resolution of the board appointing the company secretary, a policy for evaluating the company secretary and that the company secretary has received a letter of appointment setting out their statutory and governance roles