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Role of the company secretary - Coggle Diagram
Role of the company secretary
The Code has always sought to emphasise the secretary's role as an impartial adviser to the whole board
Most of the things that the CS does with regard to board governance have a critical impact on the effectiveness of the board, in perusing these activities the secretary's main ally and main point of contact will be the chair, as leader of the board
Governance role of the secretary
The Code used to state
Under the direction of the chair, the CS' responsibilities Include ensuring good information flows within the board and its committees and between senior management and NEDs, as well as facilitating induction and assisting with professional development as required
The CS is responsible for advising the board through the chair on all governance matters
The 2018 Code states
All directors should have access to the advice of the CS, who is respsobile for advising the board on all governance matters
The board, supported by the CS, should ensure that it has the policies, processes, information, time and resources it needs in order to function effectively and efficiently
Responsible for ensuring that board procedures are complied with, advising the board on all governance matters, supporting the chair and helping the board and its committees to function efficiently
Should arrange for the company to provide the necessary resources for developing and updating its directors' knwoeldeg and capabilities. This should be in a manner that is appropriate to the particular director and which has the objective of enchanting that directors effectiveness in the board or committees, consistent with the results of the board evaluation process
Resposbiibility to ensure that director, especially NEDs have access to independent professional advice at the company's expense where they judge it necessary to discharge their responsibilities as directors of the company. Committees should be provided with sufficient resources to undertake their duties
Assisting the chair in establishing the policies and processes the board needs in order to function properly is a core part of the CS role. The chair and the company secretary should periodically review whether the board and the company's governance processes, eg board and committee evaluation are fit for purpose and consider any improvements or intiaitives that could strengthen the governance of the company
The CS effectiveness can be enhanced by building relationships of mutual trust with the chair, the SID and the NEDs while maintaining the confidence of executive director colleagues. They are in a unique position between the executive and the board and well placed to take responsibility for concerns raised by the workforce about confudct, financial impropertities or other matters
Appointment and removal of the secretary
Should be a matter for the whole board
Designed to ensure that the secretary's initial appointment and continuing tenure is not dependent on the decision of a single director or group of directors, this is to reinforce the secretary's position as an impartial adviser to the whole board
If the secretary could be appointed and removed by an individual director without recourse to the board, this impartiality could be compromised as they would inevitably feel under pressure to demonstrate greater loyalty to that person
Reporting lines and remuneraton
FRC guidance recommends that the CS should report to the chair on all governance matters but may also report to the CEO or some other executive director in relation to their other executive management responsibilities
This is designed to protect the CS role as an impartial adviser to the board
It would be inappropriate for the CS to report to anyone else on governance matters
The chiar and CS have to work very closely together on governance matters and the chair needs to be able to rely on the CS to act impartialily