Here are two common misconceptions of the role of a company secretary:
1. Company secretary is a paper filer
As one of the primary roles of a company secretary is to prepare documents, people tend to overlook his effort in ensuring that these “paperwork” are correctly done and the company remains in compliance with its constitution or the relevant regulations:
2. Company secretary is an administrator
- Are the prospective corporate transactions in compliance with the company’s constitution or the relevant regulations?
- Are the right documents being prepared?
- Do the resolutions truly depict the intricacies of the corporate transaction?
- Are the correct filings made with ACRA?
Corporate secretarial documents are often seen as run-of-the-mill or a “cut, paste and edit” type of work.
One fails to realise that the importance of a company secretary in a corporate transaction is to provide advisory to the Board on matters including but not limited to potential implication, regulatory compliance, and assists the Board in executing the corporate transaction expeditiously.
What then is the Role of a Company Secretary?
Under the Companies Act 1967, it is the duty of the directors to take all reasonable steps to ensure the company secretary has the requisite knowledge and experience to discharge the functions of a company secretary. Like directors, company secretaries are officers of the company and, thus, duties of honesty, skills, and diligence are also required of them.
1. Company secretary is an administrative and regulatory compliance officer.
The company secretary maintains the register, index, minutes book or such other documents required by the Company’s Constitution or by the Companies Act to be kept by the company. He is also the person liaising with authorities such as the Accounting Corporate and Regulatory Authority of Singapore on company matters.
The company secretary ensures timely dissemination of information, documentations and reports and makes sure that proper minutes on the proceedings of all meetings of the company, all businesses transacted, and all resolutions passed are recorded.
In the early stages of a company’s business cycle, the secretarial role often goes unfulfilled or is being seen as redundant. However, should a company expand and find potential investors, due diligence has to be conducted. The company has to spend a substantial amount of time and resources to review, organise, and rectify its records to set things in order.
These could have been avoided if the role of the company secretary was adequately fulfilled from the time of the company’s incorporation.
2. Company secretary is an advisor to directors and shareholders.
One of the biggest, unseen and seldom talked about parts of a company secretary’s role is that of 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. The company secretary will also facilitate communication between the Board and its shareholders.
The company secretary advises and guides the directors in the development of business strategies and in facilitating effective and efficient decision making, given the extensive knowledge of regulatory compliance and internal governance of the company.
Finding the Right Fit
Generally, a person who is adequately equipped with the knowledge of the Companies’ Act and other compliance or governance regulations would be a good fit for the role. In Singapore, the role of a company secretary is either performed by a chartered secretary, an in-house legal counsel or undertaken by the financial controller. This is partly because the skillset and the knowledge of a company secretary is highly specialised.
The duties of a company secretary may be undertaken by professional service providers. However, it is important to find the right service provider. Directors can have the peace of mind and focus on running the business by outsourcing the function of a company secretary to competent and experienced professionals. This is particularly important if one operates in industries such as non-profit organisation, funds, healthcare, etc. with specific and delicate needs.
How We Can Help
CorpServe partners with companies throughout every stage of their life cycle. Whether they are planning their start-ups, running and managing their businesses, or growing and expanding their businesses, we are dedicated to provide a holistic one-stop business solution throughout their growth journeys.
We are also able to advise the Board and shareholders on governance and compliance matters and help them plan, simplify and execute complex corporate transactions. Furthermore, we harness technology to serve their basic secretarial needs, allowing for faster and seamless delivery anytime, anywhere.
Contact us today to find out more.
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