The demands of today’s corporate secretaries continue to increase. Not only has the shareholder landscape become more active, but board oversight continues to expand into areas like cybersecurity, human capital and ESG.
The corporate governance landscape today presents several challenges and opportunities for the corporate secretary. Uniquely positioned between the board, the management team, and the shareholders, the corporate secretary’s job is to make sure all these voices come together in the boardroom and beyond. In a recent interview, Doug Chia, Executive Director of The Conference Board Governance Center, attributed the growing complexities of the corporate secretary role to three key factors: (1) the demand for engagement with institutional investors, (2) the emphasis on corporate sustainability, and (3) the expansion of board oversight to new issues, such as culture or cyber risk.
As companies respond to investors’ call for more/better engagement, the corporate secretary is often behind the scenes gathering data from across the organization, coordinating messaging and shareholder disclosure, and guiding the board and management team through an increasingly complex regulatory environment.
With many obstacles ahead, what opportunities do corporate secretaries have to drive change across the organization? How can they position themselves as an advisor to the board amid a landscape of emerging risks? We address key responsibilities of the corporate secretary below and provide resources to frame his or her potential impact within today’s companies.
Evolving with the Board
Acting as both an advisor and extension of the board, the corporate secretary is responsible for orienting, informing and educating the board of directors. As the corporate governance landscape grows more complex, the corporate secretary role has become increasingly nuanced requiring a distinct set of skills–in particular, a keen ability to prioritize and communicate:
“Corporate secretaries have been required to bring some really critical tools to the boardroom,” explained Janet McGinness, corporate secretary for MasterCard, in an episode of Inside America’s Boardrooms. “Those are clarity, simplicity and transparency—both in the way they manage the board agenda, but also in the way they communicate regulatory changes and the complexity of strategy discussions.”
- The Corporate Secretary & Board of Directors Relationship
- What Worries Corporate Secretaries About Board Performance?
- Challenges of the GC & Corporate Secretary: Recognizing Red Flags
- How a Corporate Secretary Should Prepare for a Board Meeting
- Guidance for Documenting Board & Committee Minutes
In a recent interview, Diligent VP Dottie Schindlinger describes how digital transformation in the boardroom is evolving the role of a corporate secretary—but at the same time, underscoring their importance. In the years ahead, the most effective corporate secretaries will be the ones who can leverage technology to deliver the kind of insights that improve board discussion and ultimately facilitate better decision-making.
…the challenge has been to create opportunities for the board to more effectively govern as our company, our industry and our world changes. This might entail bringing to the table interesting ‘outside/in’ perspectives, more employee interactions, continuous learning and exposure to our business, and trends impacting it and the like. Every element of a board meeting must have a purpose and provide the right frame for effective governance.
– Janet McGinness, corporate secretary for MasterCard
Answering the Call
In their investor engagement role, the corporate secretary must work closely with the head IR (and often the nominating & governance committee) to ensure that shareholder messaging is both coordinated and comprehensive–also to ensure that any investor concerns or potential red flags are communicated back to the board and broader management team.
“Cybersecurity, diversity, shareholder engagement, environment, social and governance (ESG), the role of proxy voting advisory firms—these are just some of the issues that have seen considerable evolution in the past five years,” explained Miguel Baz, Assistant Corporate Secretary and Director, Legal Operations for Bell Canada, in a recent interview. “The corporate secretary has an increasingly central role to play in all of these areas.”
Indeed, in a survey by Forrester and Diligent, governance professionals indicated that “visibility into ESG issues” was their greatest dissatisfier, followed closely by “visibility into cybersecurity issues.”
These and other findings throughout the report underscore the complex challenges that corporate secretaries are facing related to emerging areas of board oversight—particularly when there’s not a centralized function that’s responsible for these risks within the organization.
Ensuring Compliance Across Entities
In addition to the responsibilities described above, the corporate secretary is also typically responsible for the legal entity management across the organization. Depending on company structure, this could entail hundreds–even thousands–of entities or subsidiaries, for which the corporate secretary is responsible for overseeing data accuracy and compliance.
Corporate secretaries and legal teams must ensure they have the right tools in place to address any governance risks or data discrepancies that may arise within the entity structure. Integrated, real-time reporting will continue to be a competitive advantage in this area.
As the corporate secretary’s plate is piled higher, efficiency across each functional area–board support, shareholder engagement, entity management–will be key to their success. Streamlining and digitizing administrative tasks (e.g., board materials, meeting minutes, D&O questionnaires, board evaluations, entity management) allows the corporate secretary to focus time on more strategic actions. The corporate secretary who can arm the board and management team with the right data and tools will increasingly position themselves as a strategic asset across the company. Click here to learn more about Diligent’s Board Management and Entity Management software solutions.