Introduction
Running a company or any business for that matter can be a daunting task, especially without someone to ensure compliance with all the relevant regulatory requirements, or simply, someone to ensure things get done. This is where the presence of a secretary is needed.
In times past, Secretaries were simply considered as clerks to do the bidding of the directors of a company. They were not considered important enough to have proffer any advice on the management of the company. Times have since changed where secretaries have been given higher roles in the administration of companies and are actually a requirement by law to keep the business running. After all, business would collapse without secretaries to ensure compliance with the law.
This article is to discuss the qualifications and roles od Company secretaries in modern times and establish why their presence is paramount in corporate governance.
Appointment
The directors of a company are involved in the day to day running of the business and as such they would be in the best position to appoint the company secretary. As such, in most companies, the company secretaries are appointed by the Board of Directors. However, the Company’s Constitution may vest the appointment of the Secretary in any other person.
The secretary is usually appointed and removed by the directors but the Constitution may vest the appointment in the members or any other person. This goes to show how important the Constitution is in the administration of a company.
It is prudent to know that once a company secretary is appointed, he or she must consent to the appointment in writing as required by Section 211(8) of Act 992.
Qualifications
In appointing Company Secretaries, a person must carefully consider the qualifications laid down in Section 211(1) of Act 992. Also, where the company secretary is a body corporate, the Act requires that it must have one of its promoters, subscribers, directors or operating officers as a person qualified to be a company secretary according to Section 211(1). It thus provides that the Directors shall not appoint a person as Company Secretary unless that person meets at least one of the following qualifications, i.e. that the person:
- Has obtained a professional qualification or a tertiary level qualification that enables that person to have the requisite knowledge and experience to perform the functions of a Company Secretary,
- Has held office, before the appointment, as a Company Secretary trainee or has been articled under the supervision of a qualified Company Secretary for a period of at least three years,
- Is a member in good standing of either the Institute of Chartered Secretaries and Administrators, or the Institute of Chartered Accountants, Ghana,
- Having been enrolled to practice, is in good standing as a barrister or solicitor in the Republic, or
- By virtue of an academic qualification, or as a member of a professional body, appears to the directors as capable of performing the functions of secretary of the company.
CONVENTIONAL DUTIES AND POWERS
The Company Secretary, being an officer of the company, has a fiduciary duty to the company. These duties are similar to that of an agent and a principal. These duties include the duties of Confidentiality, Diligence and Faithfulness.
Generally, Company Secretaries do not have any inherent power. They usually action the instructions of the Board of Directors, Members or other officers of the company. As such, they may have the power to do any of the following under instruction:
- Make commercial decisions for the company
- Borrow funds in the company’s name
- Conclude contracts on behalf of the company
- Register transfer of shares
- Call members’ meetings
- Institute legal action on behalf of the company
In doing any of the above, the Company Secretary must state the authority for doing any of the above. Eg. “by order of the Board”, “upon requisition of Members”.
A company’s Constitution may however permit the delegation of such powers to the Company Secretary. However, where the Secretary acts outside its scope of powers, the Directors may ratify the ultra vires transactions of the Company Secretary.
Also, as an Administrative Officer to the Board, the Secretary has the power to perform administrative functions such as ordering stationery, booking a venue, order refreshments, arrange for accommodation, rent vehicles or run errands for the office or any other acts incidental to the functions of the Company Secretary and these acts will be binding on the Company.
STATUTORY DUTIES
To clearly understand the role of the Company Secretary in the modern corporate world, Act 992 lists the required duties of any company secretary. These are listed in section 212 as follows:
- assisting the Board to comply with the constitution of the company and with any relevant enactment;
- keeping the books and records of the company;
- ensuring that the minutes of the meetings of the shareholders and the directors
- are properly recorded in the form required by this Act;
- preparing and issuing out notices in the name of the company;
- ensuring that the annual financial statements of the company are dispatched to every person entitled to the statements as required;
- ensuring that all statutory forms and returns are duly filed with the Registrar;
- maintaining the statutory registers of the company;
- providing the Board with guidance as to the duties, responsibilities and powers of the Board and on the changes and development in the laws affecting the operation of companies;
- informing the Board of legislation relevant to or affecting meetings of shareholders and directors and their failure to comply with the legislation and reporting accordingly at any meeting; and
- advising the directors on their responsibilities as directors.
Types of Company Secretaries
- Member Secretary: This is where a member of the Board of Directors is also the Company Secretary. Recorded as being present.
- Non-member Secretary: Here, the Company Secretary is not a member of the Board and cannot participate in deliberations. Recorded as being in attendance.
- Professional Secretary: Because of training received and nature of practice. Eg. Lawyers, Chartered Accountants & Chartered Secretaries.
- Executive Secretary: A company may employ a secretary as part of its full-time staff and whose schedule includes executive responsibility. Eg. Chief Administrative Officer may also serve as Secretary.
Conclusion
This write-up clearly shows the importance of the secretary as an officer of the company. Apart from it being a requirement by law, the presence and role of the company secretary cannot be overlooked as they are meant to aid in ensuring the continuity of the company. Consequently, they are not mere servants as previously thought.
