A corporate secretary in the boardroom is one of the most important resources the board has. Under state corporation laws, every public company is required to have a corporate secretary, and the individual who fills this role is a valuable member of the executive management team.
The corporate secretary’s role has expanded over time to include many administrative and managerial duties. Corporate governance is important to public companies because it provides them with a defense for ensuring corporate compliance and for addressing activist shareholder initiatives. Good governance protects companies against class-action lawsuits over securities disclosures and helps navigate Securities and Exchange Commission (SEC) enforcement initiatives. By committing to good governance, companies demonstrate that they’re invested in productivity, enhancing public relations and getting more involved in their communities. Among other things, good governance supports employees and gives boards a pathway toward increasing shareholder value.
10 Important Responsibilities of the Corporate Secretary
The role of the corporate secretary has evolved over time. As a result, the 10 most important responsibilities of the corporate secretary have also evolved and they’re very different today than they were even 10 years ago. Here’s a look at what the responsibilities for a corporate secretary look like today:
- Ensuring that the Board has the resources to fulfill its fiduciary duties to a company’s shareholders.
Today’s corporate secretary is the main “go-to” person whenever a board director, executive or committee needs guidance, advice or resources. If the corporate secretary doesn’t have the answer, it’s their responsibility to find it.
- Preparing minutes of board actions during board and committee meetings to reflect the board’s proper discharge of its fiduciary duties.
The corporate secretary plays a key role in setting the agenda, writing meeting minutes and getting them approved, as well as engaging in pre-meeting planning.
- Serving as a key consultant to the board of directors and to the executive management team.
The role of the corporate secretary has evolved into the role of a senior corporate officer who provides advice to the board about corporate governance issues. This responsibility has evolved out of the need for a greater focus on corporate governance by boards, executive management and other stakeholders. The corporate secretary is the leading board expert regarding the design and ongoing maintenance of a sustainable governance framework. In addition, the corporate secretary serves as a key member of the executive management team as it pertains to implementing and supporting the governance framework.
- The corporate secretary is responsible to ensure that the corporate governance framework for the company is properly designed, implemented and maintained.
The governance framework encompasses the board and its committees. Committees usually include the audit, finance, compensation, risk management and disclosure committees.
- The corporate secretary is responsible for legal entity governance management.
All board directors are directly responsible for legal entity governance management. The corporate secretary is responsible for overseeing this area, which includes ensuring that all board directors operate according to the provisions of the company’s Articles of Incorporation, bylaws, charters and other founding documents.
For companies that have subsidiaries, the corporate secretary also serves the subsidiaries, joint-ventures and other entities.
- The Corporate Secretary is also responsible for engaging with and being the liaison for third-party corporate governance service providers. Paul Marcela, President of Governance Partners Group, LLC, lists these specialized service providers as:
- Agenda management and Board reporting solutions
- Board portal providers
- Legal entity management system providers
- Non-U.S. subsidiary management firms
- Registered agents
- Stock transfer agents
- Director education resources
- Annual meeting service providers
- Shareholder identification services
- Abandoned property compliance services
- Director recruiter and related services
- Corporate secretaries are responsible for the company’s governance program and process development and enhancement.
As so many changes are taking place rapidly in the marketplace, there is a need for companies to ensure that their governance programs keep pace with it. Corporate secretaries are responsible to review and develop their governance programs to ensure that they’re updated and in keeping with best practices.
- The corporate secretary is responsible for board director training and development.
While board directors bring a certain degree of expertise to the board, they often need training and development in corporate governance, finance, cybersecurity or various other areas. Corporate secretaries are the lead people who administer board evaluations, conduct corporate governance audits, help to resolve succession planning issues and assist directors with education, training and orientation programs.
- Corporate secretaries play an integral role in collaborating with the executive team.
The corporate secretary is the primary person who sets the board meeting agendas. Their role requires them to collaborate with the board and the executive team to identify and prioritize discussion items for the board and committees. This responsibility extends to assisting executives with producing annual reports, sending financial press releases and reviewing insurance policies.
- Corporate secretaries are the keepers and point people for all corporate documents.
Many situations arise in which another party needs access to documents related to a sale, acquisition or divestiture to complete the due diligence process. External auditors, lenders or regulatory bodies often request corporate documents. Due diligence for transactions requires having a corporate secretary that practices good corporate governance and has good internal controls because many transactions require authorization or signature authority. Companies that are preparing for their initial public offering (IPO) also rely heavily on the corporate secretary to gather all necessary documents and comply with the SEC and stock exchange listing requirements to implement the IPO.
Concluding Thoughts on the Responsibilities of the Corporate Secretary in the Boardroom
While many corporate governance responsibilities relate to securities regulations for public companies, the role of the corporate secretary is equally as important for private companies. Both types of companies need to comply with the same corporate laws of the states of their incorporation and to manage legal liability risks. All companies must be able to produce corporate governance-related documents to third parties, such as outside auditors, lenders and regulators.
Corporate secretaries can put their best foot forward with a Diligent Corporation board management software system and other digital software solutions for corporate boards.