Company Secretary : The Key to Driving Successful Strategic Governance

The role of the Company Secretary has undergone a significant transformation in recent years, evolving to keep pace with rapidly changing regulatory demands. The Companies Act 2014 reflected this evolution by updating the duties and responsibilities of the Company Secretary when it came into force in 2015.

In today’s environment, the company secretarial role has developed from a mainly administrative function to advising the board on corporate governance, assisting the company in meeting its legal obligations, promoting transparency in communications with all stakeholders and acting as the custodian of a company’s ethical conduct. An effective Company Secretary provides a complex blend of legal knowledge and administrative expertise, seamlessly integrating the company’s business goals with its corporate governance.

It is no surprise, therefore, that many companies now outsource this function to specialist providers due to the time-consuming and complex nature of the role. If you are a business owner or company director and need a clear explanation of the requirements for a Company Secretary, this concise guide will answer all your queries.

What is a Company Secretary?

A Company Secretary is responsible for carrying out the administrative and legal obligations of the company. The board of directors must hire a Company Secretary, who can be either an individual or a company that provides company secretarial services.

Do all companies need to appoint a Company Secretary?

No matter the type of company, whether it is a private limited company by shares (LTD), a designated activity company (DAC), a public limited company (PLC) or a company limited by guarantee (CLG), it must appoint a Company Secretary to comply with the Companies Act 2014.

When filling the role, directors must ensure that the person selected has the required knowledge and experience to carry out their duties in full compliance with the Companies Act. Equally, the company Secretary must acknowledge their legal responsibilities and obligations as defined by the Companies Act.

What is the role of the Company Secretary?

The Company Secretary is the principal administrator of the organisation and has three main areas of responsibility as follows:

1. Ensure that the company obeys the law and follows the rules as decreed by the company’s constitution;

2. Carry out any instructions given by the directors; and

3. Prepare, maintain and file all legal documents relating to the company’s activities.

Characteristics of a Company Secretary:

Although formal training is not a prerequisite for the position, not everyone is suited for the role, as there are several rules governing the appointment of a Company Secretary, which are detailed below:

· If the Company Secretary is a person, they must be at least 18 years of age.

· If the company is a public limited company (PLC), the person must meet at least one of the following requirements:

· Have appropriate qualifications from the Chartered Governance Institute UK & Ireland (formerly ICSA); or

· a minimum of 3 years’ experience in the role immediately preceding their appointment; or

· Be capable of carrying out the required duties based on their previous experience.

· A person who is deemed to be a “discharged bankrupt” (ie someone who is still repaying debts on a bankruptcy filing) cannot fulfil the role.

· A person who has been found guilty of fraud or misconduct and has been barred from acting as a Company Secretary for a specific period of time is also disqualified from the position.

· A “restricted” person (somebody who has acted dishonestly in relation to an insolvent company) is not allowed to fill the position of Company Secretary.

Appointment of a Company Secretary:

The directors appoint the Company Secretary, specifying the duration of the appointment, salary, and job requirements. They can also remove a Company Secretary whom they have appointed.

Following the formal appointment, the directors must include the Secretary’s name in the company’s constitution and submit it to the Companies Registration Office (CRO) to complete registration. Once appointed, the Company Secretary must put their agreement in writing to confirm their role as Secretary of the company.

A director can also act as the Company Secretary; however, a company with only one director must appoint a separate person as the Company Secretary.

Duties of the Company Secretary:

The Company Secretary has several statutory duties to perform, which are mainly split between administrative and legal responsibilities, as listed below:

Legal Duties:

The Companies Act 2014 recognised that company secretaries do not have the power to make companies compliant and, therefore, are not required to ensure compliance with the Companies Act. However, as compliance obligations increase, they perform a vital role in advising and guiding the board of directors on their legal obligations, including ensuring that the board acts in accordance with the constitution and shareholders’ agreements. Other legal duties include:

· Assist directors to prepare and file all updated, statutory documents with Companies Registration Office (CRO) (such documents include annual returns, receivership orders, statement of compliance, statutory declarations) and other relevant organisations within the specified deadlines;

· Confirm that the financial statements relating to the annual return are true copies of the originals; and

· Prepare up-to-date, accurate statements of the company’s assets and liabilities in the event of liquidation or receivership.

Administrative Duties:

· Provide administrative and legal support to the directors and execute any duties delegated by the directors;

· Maintain the company’s registers of members, directors and company secretaries and a record of their shares and contracts in the company;

· Clearly communicate the board’s decisions;

· Monitor filing deadlines to avoid late filing penalties;

· Publish statutory notices as and when required;

· Schedule the annual general meeting (AGM) and any EGMs (extraordinary general meetings) and circulate all meeting documents to directors and members;

· Take and prepare the minutes of all meetings (general meetings, board meetings and sub-committee meetings) and distribute to directors and members;

· Ensure that the company’s registers and any other required documents are up-to-date and readily available for viewing by the directors and the public; and

· Safekeeping of the company seal (the company stamp used for stamping official documents) and counter-signing any documents which must be stamped with the seal.

In addition, every Company Secretary is personally responsible for disclosing their full name, address, and date of birth on the company registers and to the CRO. They must also disclose any shares or debentures they may have in the company or any other company in that corporate group, including purchases or sales of shares or debentures. This also applies to any shares or debentures held by a partner, spouse or child in the company or any other company in the corporate group.

While the Company Secretary has limited power, they do have the authority to set up contracts for the day-to-day running of the business, whether approved by the directors or by themselves, and to execute any decisions made by the directors.

Finally, as the Company Secretary could be liable for any loss arising from their own negligence, they must exercise due care and diligence in carrying out their responsibilities, acting in good faith for the benefit of the company. Note that a Company Secretary may face penalties if they break the rules of the Companies Act 2014.

Should you consider outsourcing the Company Secretarial Services?

Given that there are many challenges to managing company secretarial tasks in-house, it is worth taking time to consider some benefits of outsourcing corporate secretarial tasks to a specialist provider, as noted below:

Access to Legal Expertise:

The scope of the Company Secretary’s role is quite daunting and requires constant monitoring of constantly changing regulations. Outsourcing to a company secretarial service provides instant access to expertise in Irish corporate law, corporate governance, and regulatory compliance.

Reduction of Overhead Costs:

Outsourcing to corporate secretarial services eliminates the salary and ongoing training costs associated with an in-house Company Secretary. Moreover, an in-house Secretary might lack the specialised knowledge and resources required to handle more complex legal matters.

Focus on Business Development:

Engaging external company secretarial services allows management and employees to focus on core business and strategic objectives and reduces the time spent on compliance issues.

Risk Reduction:

Due to the complexity of Irish regulation, outsourcing to a specialist reduces the risk of non-compliance, missed deadlines and potential ensuing penalties.

Key Takeaways:

Clearly, this position has evolved far beyond the administrative aspect, driven by the increasing demand for accountability and corporate transparency. The Company Secretary is now a key strategic advisor, bringing specialist knowledge and skills across several areas within the organisation, including corporate governance, board development, transparency, ethical standards, and reporting. The benefits for the company are enormous, helping to ensure long-term financial stability by establishing a structure for effective management and protecting the interests of all stakeholders.

The breadth of this assignment is so complex and challenging to manage in-house that many companies opt to engage an external company secretarial service, allowing them to pursue their strategic objectives and focus on core business activities.

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