International experience shows that the regulation of corporate secretaries is found, if not in legislation, then in the recommendations or good practice of many countries. So, who is it, and what functions does he perform?
Corporate secretary and his functions in the corporate governance system
The classic role of a corporate secretary stems from the peculiarities of the Anglo-Saxon model of corporate governance when in a company with dispersed ownership, whose shares are traded on the stock exchange, share control over management is carried out with the help of the board of directors.
The board, in addition to the Chairman, may include his deputies, chief lawyer, chief accountant, heads of major departments and subsidiaries, branches, representative offices, corporate secretary, and others. The executive bodies of the corporation are in the system of corporate governance as a unit responsible for solving current tasks and implementing the overall strategy of business development.
The corporate secretary is an experienced and respected high-ranking employee in the company’s hierarchy. Functionally, he is subordinate to the chairman of the board of directors and serves for him as the only vertical of power on which he can rely.
To provide professional assistance in organizing the work of the corporate governing bodies, the formation of information support for effective decision-making, and proper information of shareholders and stakeholders, the position of corporate secretary is introduced. In world practice, the institution of corporate secretary has existed for almost a century, is quite dynamic and responsive to socio-economic changes in society. In many countries, professional non-profit associations of corporate secretaries have been formed, the main objectives of which are to assist secretaries in acquiring the knowledge and skills necessary for the effective performance of their duties; raise their professional level; advising on various issues.
The common tasks of the company secretary
The sphere of responsibility of the corporate secretary of the joint-stock company is to maintain regular effective interaction between the owners of the company, shareholders, its top management, and the board of directors.
Following the principles of corporate governance, the main tasks of the corporate secretary are:
- аacilitating the establishment of effective communication and interaction of all governing bodies of the corporation, its officials, shareholders with each other and with third parties, avoidance of conflicts or their prompt resolution;
- ensuring the preparation and holding of general meetings of shareholders, meetings of the governing bodies of the corporation;
- maintaining corporate protocols, ensuring their preservation and access to them;
- ensuring prompt, timely, and reliable information of the governing bodies of the corporation, its officials, shareholders;
- providing proposals to the corporation’s bodies on the development of internal documents and bringing them in line with current legislation;
- monitoring the corporation’s compliance with legal requirements;
- maintaining the documentation of the corporation;
- performance of administrative functions. The rights, responsibilities, and amount of the company’s secretary’s remuneration are set out in the contract.
The existence of the institute of corporate secretary in the organizational structure of the company involves the formation of a kind of information center of the corporation, which accumulates a significant amount of information and ensures its systematic exchange between management and shareholders to make effective decisions. The corporate secretary can perform his duties both individually and by forming his management staff of several full-time employees, which will contribute to its effective work.