Company Secretarial Tips

Company Secretarial Tips
The Executive Committee

The Executive Committee, commonly referred to as the ExCo, is basically a
management committee which usually comprises of the CEO and other
executives/heads of business. An ExCo can be a useful committee for very
large boards, whereby all members of the boards cannot meet regularly,
especially when they are from different countries or geographical regions.
Indeed, the ExCo ensures that urgent business is attended to in the absence
or unavailability of the full board.
The role of the ExCo can include the following:
Generally assist the CEO in his/her duties;
Recommend objectives and strategy to the full board, reviewing the
objectives and strategy, and ensure that the companys strategy is executed
successfully;
Ensure that appropriate levels of authority and expertise are available
throughout the organisation for the effective execution of the companys
strategy;
Prepare and present to the full board the companys budgets and
strategic plans;
Monitor business performance against objectives, strategy and key
performance indicators as set by the board;
Optimize allocation and use of the companys resources;
Co-ordinate business operations between business divisions;
Develop and implement appropriate remuneration structures within the
company;
Review the organisational structure of the company and recommend
any required changes to the board;
Ensure compliance with relevant laws and regulations;
Ensure that the companys risk and internal controls are operating
effectively;
Identify new business opportunities, including strategic alliances, joint
ventures etc with other companies; and
Generally guide the board on all strategic and operational matters.
For the ExCo to work effectively, a well-defined charter or terms of reference
should be in place. Care should also be taken not to concentrate too much
power on the ExCo as this may lead to some non-ExCo members feeling
inferior and to the formation of ExCo and non-ExCo cliques within the board.
The Company Secretary and the Chairman have a defining role to play in that
respect to ensure that the ExCo works smoothly and is not counterproductive
to board effectiveness.

Corporate Citizenship
It is being widely accepted globally that corporate citizenship is vital to longterm profitability and sustainability of an organisation. Corporate citizenship
refers to companys commitment to ethical behaviour in its business strategy
and operations, including a strong concern for social and environmental
issues and stakeholders interests. An organisation which demonstrates good
corporate citizenship benefits from improved reputation, greater productivity
and higher employee retention. It is therefore important that boards integrate
corporate citizenship into their corporate strategy.
The board may improve corporate citizenship through the following:
1.
Defining a set of values that the organisation should adhere to in terms
of business integrity, transparency, employee welfare, environment
protection and corporate social responsibility. When defining the values,
guidance may be sought from the United Nations Global Compact, which is
a global corporate citizenship and sustainability initiative. It aims to assist
companies in implementing a set of universally accepted principles on human
rights, labour environment and governance issues so that businesses not only
benefit the economy but also the society and environment.
2.
Formalising the implementation of corporate citizenship by allocating
this task to a sub-committee of the board, which may be the corporate
governance committee. The responsibility of this sub-committee will be to
ensure that the defined set of values are effectively being adhered to by the
organisation, and to make recommendations to the board on how to improve
the implementation of the corporate citizenship.
3.
Encouraging on-going and constructive dialogue with all stakeholders,
including employees, regulatory authorities, non-governmental organisations,
local communities etc., so as to understand how to better improve long-term
stakeholders interests and to proactively prevent any adverse impact of the
organisations activity on stakeholders.
Corporate citizenship involves investing resources now for benefits which
may take time to materialise. However, the long-term benefits, in terms of
increased shareholder and stakeholder value, are undeniable. To sustain
these benefits, the board should ensure that implementation of corporate
citizenship values remains an on-going process in the organisation.
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Directors: Joining the right board

Having the right board composition is one of the factors which contribute to
improved board performance, and therefore selecting the right director for
the board of a company is crucial. From the directors perspective, it is
equally important to analyse the board on which the director is going to sit
and assess whether he/she will be able to make valuable contributions to the
board. This can be done through a due diligence on the company and the
board by the director prior to his appointment, and by ensuring that the
directors induction program provides the right information and guidance.
Due diligence prior to appointment
Due diligence on the company and board involves a thorough examination of
all relevant aspects, which may include the following:
Consulting the companys annual report and website to understand the
business model, governance framework, market environment and dynamics,
recent operational and financial performance, the strategy and risks of the
company.
Having a pre-appointment meeting with the company secretary to
understand the board composition, board dynamics and board procedures.
Assess the following:
Whether the company and the board are clear on the
expectations of a new director and whether the director will be able to make
a positive contribution to the board.
Whether the new director will be able to fulfill his/her time
commitment in terms of preparation for and attending board and committee
meetings.
If the performance of the company is dwindling, whether the new
director will be able to improve the companys performance.
Whether there is a suitable director induction program and
adequate on-going training/development.
Directors induction
An effective directors induction program should include information/guidance
on the following:
The duties and responsibilities of the new director.
Board and committees structure, board composition, matters reserved
for the board, delegated authorities, terms of reference of board committees,
brief biography of other directors, succession planning, and any policies on
re-election of directors.
Details of board meetings, including minutes of meeting, schedule of
dates of future meetings, board procedures, and any training required for the
use of online board portals and software.
Boardroom behavior, including an explanation of the expectations,
culture, values, codes of conduct/ethics applicable to directors.
A brief on the applicable Laws, Rules, Regulations and Guidelines,
especially relating to directors duties and corporate governance.
Current issues of the company, including key governance issues,
outcome of the board evaluation report, if any, and shareholders feedback
from the last annual general meeting.
7.
Nature of the company, business and markets. This includes the

corporate history with details of key events, the organisational chart, details
on the domestic and foreign branches, products and services, key
performance indicators, risk profile and tolerance, internal control
procedures, other relevant details.
8.
Companys people, especially senior management and important
contact persons.
9.
Companys relationships with investors, major shareholders, key
customers, suppliers and stakeholders.
The main point of contact for a prospective director is usually the company
secretary, who has an imperative role to play in assisting the director in
carrying out the due diligence on the board and company, and eventually, for
the induction of that director if he agrees to his appointment.

Boardroom Technology
With the advent of tablets and online board portals, boards around the world
are increasingly making use of such boardroom technologies. Indeed, as
businesses and corporate communication become more digital, it has
become imperative for boards to start adopting technology in the boardroom.
Some of the benefits of using boardroom technologies are listed below.
(i) Easier and more rapid manipulation of board papers With online board
portals, which provide a secure environment wherein board papers can be
uploaded, the company secretary can easily manage board papers,
digitally distribute them to board members, segregate information
according to the rights and restrictions of different committees, and
amend the board papers online with updated information in no time. This
avoids the hassle and stress of printing board packs, arranging for their
delivery, last minute changes to board papers and shredding of board
packs after meetings. Directors can also take advantage of the various
options available in most board portals, like annotation or commenting on
board papers.
(ii) Increased visibility into the operations of the company Online board
portals allow directors to have access to board papers and information
even after the meeting. This means that figures and information can
constantly be updated on the portal and directors can thereby have a realtime update on the progress of outstanding actions following the meeting.
(iii Greater responsiveness to unexpected events Some unexpected events,
) like disasters and crises, may warrant an urgent board meeting. Through
tablets, online board portals and tele-conferencing, urgent board meetings
can be held more easily, as compared to arranging for paper board packs.
(iv Improved board dynamics The fact that all information are available and
) updated on a board portal means that directors have all the information
that they require on a single platform and can therefore make informed
decisions more easily and rapidly. Moreover, through online board portals,
directors who are seated in different geographical locations can have
access to the board papers at the same time as all other directors, and
can thereby provide better input to the board meeting.
Boardroom technologies are definitely not the panacea of the board, but they
can be used as an enabler to improve board performance. To get the best out
of boardroom technologies, the board needs to include the use of technology
as a regular item on the agenda, to consider and re-assess the benefits and
risks of technology to the board and the company.
Managing dissent in the boardroom

It is commonplace for some directors to disagree or dissent with other directors of the board as
this is an integral part of the decision-making process. Dissent may occur due to differing views
among directors on issues such as development and implementation of a new strategy,
acquisition of a new business, the dividend policy, or the appointment and retention of directors.
If not managed, boardroom dissent may lead to the following:
Though boardroom dissent helps the board to have healthy and robust debates, when it
degenerates into conflicts and personal attacks, the effectiveness of the board, especially its
decision-making process, is jeopardised; and
Dissenting directors, feeling that the board is not receptive to their views may out of
exasperation resign from the board. For listed companies, if the resignation needs to be notified to
the public and if the dissenting director discloses the reasons of his resignation in the press, this
may tarnish the reputation of the company.
It is therefore important to manage dissent in the boardroom so as to safeguard the effectiveness

and efficiency of the board.
The following can help to manage dissent in the boardroom:
Effective board leadership The chairperson has a duty to oversee the board and encourage
open and constructive debate. The chairperson should therefore be able to call board members to
order when the discussion becomes too aggressive or counterproductive to efficient decisionmaking;
Implementing and communicating a proper boardroom practice guideline to all directors,

which would include guidance on the expectations in terms of professionalism and behavior in the
boardroom, and other aspects of boardroom etiquette. This guideline will be particularly helpful to
directors having a dominant personality and will help to improve the board culture, especially in
terms of intra-board interactions and the decision-making process; and
Adequate preparation by directors prior to board meetings Directors should raise

disagreements on an informed basis, after analysing all relevant facts and figures or seeking
appropriate professional advice. This will also lead to more mature and objective debates in the
boardroom, rather than dissent being based on personal disagreements among directors.
Though managing dissent is the individual responsibility of all board members, the chairperson
should constantly supervise the board and its decision-making process to ensure that dissent in
the boardroom is properly managed.

Avoiding directors conflicts of interests
Directors have the fiduciary duties to act in the best interests of the company
and to avoid any conflict of interests. Failure to avoid conflict of interests may
lead to penalties and sanctions from regulatory authorities, including
disqualification of a director. Therefore, it is important for directors, with the
help of the company secretary, to ensure that conflicts of interest are
avoided.
A. What amounts to conflict of interest?
Conflicts of interests may be broadly classified into the following categories:
(i) Direct financial interest whereby the director directly derives financial
benefit from a transaction of a company, or whereby the director has an
interest (is director, shareholder, officer, trustee, etc.) in another entity
from whose transaction he shall or may derive a financial benefit. For
example a sale of assets below market value to a director or awarding a
contract to a company on which the director has an interest.
(ii) Indirect financial interest whereby the director is the parent, child or
spouse of another person that shall or may derive a material financial
benefit from a transaction of the company. For example, awarding a
contract to a company on which a parent, child or spouse of the director
has an interest.
(iii Non-financial or personal interests whereby directors receive no financial
) benefits, but gain some personal advantages, for example awarding a
contract to a close friend or close contact of the director.
Conflicts of interest include actual and potential interests as well. Therefore,
even if a transaction has not yet been conducted, directors need to be alert
for any potential conflict which may arise in the eventuality of a transaction
with a person or entity with which they have any direct, indirect or personal
interests.
B. How can conflicts of interests be avoided?
The following may help to avoid directors conflict of interest:
(i) Regular reminder by the company secretary to directors that they need to
disclose their interests during board meetings, and upon the acquisition of
any interest. The company secretary can also guide directors by providing
them with concrete examples of cases whereby an actual or potential
conflict may arise.
(ii) Maintaining and updating a register of directors interests. This is usually
statutorily required in several jurisdictions which also provide for register
of directors interests to include sufficient details of the interests. These
details might include the nature of the interest, the date from which the
interest arose, and the date on which the interest was notified to the
company. As best practice, some directors also provide a list of all their
directorships in other companies with which a potential conflict might
arise if ever a transaction is contemplated with these companies.
(iii To be aware of any conflicting situation, the company secretary first needs
) to be aware of any relationship the directors may have with suppliers,
customers, competitors, advisors, shareholders, financial institutions and

regulators of the company. The company secretary would thereby be able
to foresee any potential conflict which may arise and record that interest
accordingly in the register of directors interests.
(iv A director who has an interest in a transaction should, during the board
) meeting, declare his interest, if not already done, and abstain from voting
on that transaction.
(v) All of the above measures can be appropriately set out in a robust conflict
of interest manual, to which all directors and the company secretary
would need to abide.

The Business Case for Corporate Governance
Corporate governance broadly refers to the ways in which a company is
directed and controlled. There is often a misconception about corporate
governance being a hurdle to the operations of a company, and does not
bring any immediate or tangible benefit. However, companies around the
world are today starting to acknowledge that good corporate governance
does yield considerable benefits to the business.
Some benefits of implementing good corporate governance are as follows:
(i) Substantial improvement in organisational efficiency corporate
governance entails putting in place formalised processes and internal
controls, which in turn help to improve board efficiency and effectiveness,
enterprise
risk
management,
financial
management
practices,
transparency in reporting and relationships with shareholders.
Improvement in all the afore-mentioned aspects of corporate governance
leads to improvement in a companys organisational efficiency.
(ii) Reduced risk of corporate crises and scandals corporate governance
requires that a company puts in place a robust enterprise risk
management system, which enables companies to mitigate the effects of
economic crises and to avoid corporate scandals. A robust enterprise risk
management system, along with an effective succession planning, also
helps a company to remain operationally viable and prosperous for a
longer period of time.
(iii Positive impact on company performance and profitability improved
) organisational efficiency entails more efficient management, better
resource allocation and higher productivity. This in turn helps to improve
company performance and profitability.
(iv Improved company reputation the implementation of good corporate
) governance and the effective reporting thereof can help a company
improve its image vis--vis its stakeholders (including investors, business
partners, creditors, local authorities and the community). Good corporate
governance also leads to an improvement in the internal reputation of the
company by enhancing employees morale and culture, as the latter
become more confident in the companys future.
(v) Increased ability to access finance a company with good corporate
governance instils greater market confidence and is therefore better able
to attract finance from investors and financial institutions. Some stock
exchanges around the world have also developed indices which depend on
the quality of the corporate governance framework put in place by a
company. Therefore, companies with an effective corporate governance
framework are viewed by investors as having a greater market premium
and they are more willing to invest in such companies.
Implementing a good corporate governance framework involves additional
costs and resources. However, even if the positive impacts of corporate
governance may not manifest in the short term, in the longer run, a good
corporate governance framework inevitably translates into higher
profitability, better sustainability and increased shareholder value for the
company.

Improving Collective Decision Making
Reaching a consensus on items of the agenda may prove to be quite a
challenge for some boards. Indeed, the fact that each board member has a
different way of thinking, approach and personality means that intra-board
interactions can sometimes lead to conflicts. However, if board members try
to develop the skills described below, board interactions and collective
decision making may be improved.
(i) Mediation mediation skill is important to address conflict situations in the
boardroom. This skill is particularly important for the chairperson, in
his/her role of providing overall leadership to the board. The chairperson
should be able to bring the board back to order should conflicting
situations arise;
(ii) Engaging others this skill involves the ability to engage other board
members through clarity of communication and relationship building, and
is important for gaining the support of other board members when voting
is required for a decision. This in turn facilitates decision making as the
board can more easily reach an agreement;
(iii Agility of mind Agility involves the ability to quickly assimilate facts and
) ask incisive and relevant questions during board deliberations. This helps
to prevent non-constructive debates and delays in taking decisions due to
a lack of understanding of the issue being debated by board members;
(iv Patience and listening skill In some instances, one or some of the board
) members may have a dominant and aggressive personality. In these
cases, patience and listening skills are essential if the board wants to
promote active participation by all board members.
(v) Empathy Empathy involves having an open mind and being able to
understand and accept the point of view of other board members. When
board members understand the point of view of their fellow directors,
disagreements and conflicts are minimised, and this fosters a smoother
decision making process;
(vi Trust and respect Trust and respect among board members are important
) for ensuring that board discussions do not degenerate into open fights.
This also enables board members to stay professional in terms of the
verbal and body language used during board discussions.
Improving the collective decision making process of the board requires a
continued effort from all board members. The chairperson, assisted by the
company secretary, also needs to guide and re-direct the focus of the board
on the matter at hand when the decision making process is compromised due
to conflicts and disagreements among board members.
The Risk Management Framework

Having a sound risk management framework is crucial for ensuring the
resilience and success of a company. It also provides assurance to
stakeholders that the board is appropriately managing the risks of the
company to ensure long term increase in shareholder value. An effective risk
management framework usually defines the risk agenda, the risk assessment
procedure, risk response strategy and risk communication policy.
Risk Agenda
The risk agenda should set out the reasons why the risk management
activities are undertaken and the benefits to be expected in terms of strategy
and performance. It should be defined in accordance with the size, nature,
complexity and regulatory framework of the company. For instance, the risk
agenda could include the following:
Identifying the significant risks facing a company;
Formulating the risk appetite in accordance with the risk tolerance
strategy of the company;
Regularly assessing the risk exposure;
Controlling and reducing risks as far as reasonably practicable;
Ensuring sustainable business growth through an effective risk
infrastructure;
Encouraging clear decision-making as to which risks to accept,
manage, transfer or avoid; and
Promoting a proactive risk management culture.
Risk Assessment Procedure
The risk assessment should define the risk classification systems, including a
description of each risk event, and its impact, likelihood and magnitude. Risk
assessment would normally cover the following:
Creating and updating a risk register which records all the risks relating
to each business unit in the company;
Assessing the likelihood and impact of each risk item identified in the
risk register by using risk matrices which are relevant to the business of the
company; and
Deciding on level of risk which is tolerable to the company.
Risk Response Strategy
The risk response strategy should describe the controls in place to manage
and mitigate the risks faced by the company. It should also cater for
improvements to be brought to the existing framework in light of new risks
identified. The following are examples of some risk response measures:
Putting in place controls and procedures to decide whether to tolerate
risks (accept risk and take no further action), mitigate risks (reduce risks
through controls), transfer risks (share risks through insurance or other
measures) or terminate risks (avoid risk by eliminating the risk factors);
Developing any additional control and setting the deadline for
completion of same; and
Monitoring regularly the efficiency and effectiveness of existing
controls.
Risk Communication Policy

The risk communication policy should describe the internal risk
communication and risk escalation procedure, by defining the reporting
structures among the board, management and employees and the relevant
risk documentation required. It should also address any external reporting of
risks, for instance, reporting to regulators or any whistleblowing procedure to
be put in place.
In most cases, the risk management framework would be the responsibility of
the risk committee and therefore the terms of reference should cater for the
above. An effective risk management framework enables better reporting by
the company in terms of risk, which in turn, provide stakeholders with the
necessary assurance of the long-term success of the company.

The Corporate Governance Role of Company Secretaries
With some important responsibilities such as organising board meetings and
ensuring compliance with laws and regulations, the company secretary plays
a central role in every organisation. Apart from their traditional duties,
company secretaries are now increasingly being called to fulfil corporate
governance roles in the wake of more stringent requirements on
organisations for greater corporate reporting, openness and transparency.
The corporate governance roles of the company secretary include the
following:
Board composition and procedures
(i) Ensuring that the board and its committees have the appropriate balance
of skills, experience, independence and knowledge of the company;
(ii) Establishing a formal schedule of matters reserved for decision by the
Board and a formal division of responsibilities between the chairman and
CEO;
(iii Assisting the chairman in ensuring that there is open and constructive
) debate during board discussions and that professional advice is sought to
assist the board to make decisions for complex, contentious or businesscritical issues;
Board information, development and relationships
(iv)Facilitating efficient information flows between board members, board
committees and senior management, as well as fostering effective
working relationships between executive and non-executive directors;
(v) Developing a proactive relationship with board members, and being an
independent and impartial source of information, advice and support;
(vi)Planning and organising director induction programmes and continuous
professional development programmes to refresh directors skills and
knowledge;
(vii Supporting the process for the board to undertake formal annual
) evaluation of its own performance and that of its committees and
individual directors;
Accountability
(viii Having a detailed knowledge of, and advising on, the boards
)
responsibility to present a fair, balanced and understandable assessment
of the companys position and prospects in annual and interim reports
plus other sensitive public reports and reports to regulators;
Risk Management
(ix Assisting the board in an annual review of the effectiveness of the
) companys risk management and internal control systems including
financial, operational and compliance controls;
Relationship with shareholders
(x) Ensuring the board keeps in touch with shareholder opinion on a
continuous basis; and
(xi Managing the convening and conduct of the AGM and using it as an
) opportunity to build and strengthen relationship with shareholders.
For a more effective implementation of corporate governance in the board,

the company secretary needs to work closely with the chairman to address
any situations hindering good corporate governance practice in the
boardroom. The company secretary also needs to be independent, impartial
and free from any pressure on the part of board members to be able to fulfill
the corporate governance roles effectively.

Assessing board performance
The board of a company is generally expected to fulfil certain roles, including

providing entrepreneurial leadership for the long-term success of the
company within a framework of prudent and effective controls. However,
boards do not always meet the expectations of stakeholders in terms of
performance, which may lead to corporate failures. Assessing the boards
performance on a regular basis is therefore imperative for a companys good
governance and success.
The boards performance can be assessed from the following:
Chairpersons leadership
Whether the chairperson is:
setting the boards agenda based on value creation and achieving
(i)
strategic objectives;
ensuring that adequate time is available for discussion of all agenda
(ii)
items, in particular strategic issues;
(iii) promoting a culture of openness and debate by facilitating the effective
contribution of board members and fostering constructive relations
among the board;
ensuring that the directors receive accurate, timely and clear information
(iv)
to facilitate board discussions;
(v) ensuring effective communications with shareholders and stakeholders;
(vi) catering for the continuous development of all board members;
Board Composition and Succession Planning
Whether:
(i) the board and its committees have an appropriate balance of skills,
experience, independence and knowledge to enable them to discharge
their duties and responsibilities effectively;
(ii) there is a formal, rigorous and transparent procedure for the appointment
of new directors, based on objective criteria and merit; and
(iii there is an appropriate succession planning to ensure that the board has
) the right mix of skills and experience at all times.
Board Engagement and Development
Whether:
(i) board members are able to allocate sufficient time to the company to
enable them to discharge their responsibilities effectively; and
(ii board members receive sufficient induction and refresher training to help
) them understand the business of the company and their responsibilities as
directors.
Board dynamics
Whether:
(i) the board is supplied with high quality and accurate information in a
timely manner to enable it to make decisions more effectively;
(ii) professional advice is sought to assist the board to make decisions for
complex, contentious or business-critical issues;
(iii there is open and constructive debate and challenge during board
) meetings, within an environment of trust and appropriate boardroom
etiquette;
(iv sufficient time is allocated for reflection and consideration of alternatives
) during the decision-making process;
(v) the board is able to balance commercial imperatives and short-term
performance with corporate responsibility and long-term stability; and
(vi sufficient attention is given to risk, especially in cases where the level of
) risks involved in a project could endanger the stability and sustainability
of the company.
Board Evaluation
Whether:
(i the board undertakes a formal and rigorous evaluation of its own
) performance and that of its committees regularly, to address
shortcomings in the chairmans leadership, board composition, succession
planning, board development, board engagement and board dynamics.
In assessing the boards performance, both quantitative and qualitative
methods should be used. While quantitative methods, such as
questionnaires, will provide specific and measurable results, qualitative
methods, such as independent observation, can provide a richer picture of
boards performance and complement the quantitative information obtained.

Re-assessing the role of the risk committee
Corporate failures are often attributed to the boards inability to recognise the
underlying risks faced by a company, and to take appropriate measures to
manage those risks. As the responsibility of risk management is often
delegated to a risk committee, a corporate failure is thus a reflection of the
failure of the risk committee. For a more effective risk management, risk
committees are expected to do the following:
Discuss the risk appetite of the company in conjunction with the management team
determine the risk management objectives and strategies, taking into account the curre
prospective macroeconomic, financial and legal environment;
Review the entitys risk management infrastructure and control systems to ensure tha
are capable of fulfilling the risk management objectives and strategies, and that they p
both quantitative and qualitative information to the board on the companys risks;
Review the adequacy and security of the companys arrangements in terms of whistle-b
and suspicious transaction reporting. The committee shall ensure that these arrange
allow for independent investigation of such matters and appropriate follow up action;
Ensure that risk assessment is carried out regularly throughout the entity, as part
enterprises risk management objectives;
Communicate regularly with the board of directors and senior executives, including th
and Chief Risk Officer (CRO), on matters related to risk management;
Oversee the CROs role and responsibilities;
Monitor risks faced by the entity by analysing the periodic reports from the CRO and p
appropriate measures accordingly, including investigations on the companys activity;
Ensure that appropriate advice is provided to the board before a strategic decision is
particularly on the risk aspects of the decisions. Where appropriate, ensure that the
seeks external professional advice on strategic decisions; and
Review the performance and terms of reference of the risk committee annually. This in
assessing whether the risk committee is able to perform its functions effectively a
accordance with the relevant laws, regulations and best practice. Members of th
committee should also be given appropriate and timely training on risk management.
Risk committees do not make decisions as such, but only advise and enable
the board to make better informed decisions collectively. The ultimate
decision-making authority and accountability thus remain with the board and
the latter needs to ensure that the recommendations of the risk committee
are translated into appropriate actions for the risk management system to be
effective. The company secretary also has a major role to play in that respect
by facilitating the flow of information between the board and the risk
committee.
Board Integrity
A companys integrity is critical to its reputation and business, and helps to
avoid corporate scandals due to lack of good faith, care, loyalty and ethics on
the part of its officers. Improving a companys integrity is thus a crucial task,
and the best way to promote integrity across an organisation is to start by
improving the boards integrity.
A boards integrity may be improved by the following:
Board composition
(i)
Appointing and retaining board members who possess qualities such as high le
personal integrity, ethics, independence of mind and judgment, emotional intelligenc
knowledge of legal and corporate governance issues;
(ii)
Developing an appropriate succession planning, especially in family-owned comp

whereby there would be a tendency to appoint family members to the board withou
regard to the qualities and skills required to fulfil the duty of a director;
Fiduciary duties
(iii)
Ensuring that all board members act in good faith, and make well-informed, pr
considered and objective decisions which are in the companys best interests;
(iv)
Assessing and addressing any actual or perceived conflict of interests, whether the int
involved are personal interests, interests of the persons who appointed the direc
pressure from lobbyists;
Corporate Culture
(v)
Building and maintaining an ethical, legally compliant culture by establishing processe

procedures for preventing and detecting violations of laws, regulations, gover
documents, and various company policies and codes of ethical conduct;
(vi)
Assessing the efficacy of those processes and procedures, and taking remedial a
accordingly;
Risk oversight
(vii)
Understanding comprehensively the corporate risk profile and putting in place appro
systems and procedures to address those risks;
(viii
)
Ensuring that risk management units have the appropriate visibility, stature
independence to raise risk issues, and to prompt management and board respons
timely manner;
Stakeholder engagement
(ix)
Making and communicating decisions in a transparent manner so as build a

relationship between the company and its stakeholders; and
(x)
Seeking to understand stakeholder concerns and views on different corporate m

including director nomination process and company performance issues, and demons
a willingness to engage with stakeholders to address those concerns.
Improving the boards integrity is an ongoing process which requires collective as w

individual efforts on the part of board members. The company secretary and chairma
assist the process by monitoring the boards progress in improving its integrity and m
appropriate recommendations.
Boardroom Etiquette
The board is the central mechanism responsible for developing and
implementing a companys strategy through effective decision making. The
boards capacity to make high quality and informed decisions is often
impaired due to poor boardroom behaviours on the part of directors who use
mobile phones and other electronic device during the meeting, arrive late,
converse with colleagues on non-board issues, come unprepared at the
meeting and demonstrate inappropriate conduct, to name only a few. It is
thus imperative that board members regulate their behaviours through
appropriate boardroom etiquette to ensure that the board fulfils its role
effectively.
Some ways for directors to have appropriate boardroom etiquette are as
follows:
Before the meeting
(i)
Being clear on the purpose of the meeting and the contributi
(ii)
Going through the board papers and requesting for any clarifi
(iii)
Preparing questions and issues to be discussed during the m
(iv)
Making necessary arrangements to arrive at the meeting on
During the meeting
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
Avoiding use of mobile phones or other electronic devices

Refraining from gossip or non-board conversation during
Focussing on the agenda items so as not to divert the att
Listening attentively and respectfully to others, making n
Avoiding any pursuance of self-interest and thinking only
Contributing to the board discussions by raising relevant
Being open to challenge and debate, and accepting diver
Being aware of any inappropriate body language which m
Attending the entire meeting - If there is some urgency a
The responsibility to follow boardroom etiquette rests with each individual

board member. However, the chairperson also has a leading role to play for
ensuring that every director demonstrates the right boardroom etiquette.
Firstly, the chairperson himself needs give the example by displaying the
appropriate boardroom etiquette. Secondly, with the assistance of the
company secretary, the chairperson needs to take account of any breach of
boardroom etiquette and discuss same individually with the director
immediately after the meeting.

Raising the status of company secretaries
Over time, the role of company secretaries has evolved. They are now in
charge of a plethora of different tasks, ranging from the basic responsibility of
organising meetings and taking minutes to more sophisticated task like being
the conduit of information to the board. However, this evolution has not
necessarily brought about an elevation in the status of the company
secretary. The next evolution may therefore be in that sense.
There are several ways how the status of company secretaries can be
elevated. These include:
1.
2.
3.
4.
5.
Changing the mandate the role of the company secretary is often

viewed as revolving around administrative tasks such as preparing meetings
and taking minutes. The company secretarial department also sometimes
becomes a dumping ground for responsibilities which cannot be assigned
elsewhere, which further diminishes the status of company secretaries.
However, in the current context whereby good corporate governance is
internationally becoming more and more of an exigency, company secretaries
have the potential to become high level board advisors on corporate
governance issues and to thereby influence the decision of the board.
Developing commercial acumen Company secretaries may often be
seen as scaremongers who focus purely on administration and compliance,
while being oblivious of the business and commercial aspects of an
organisation. By developing more commercial acumen, company secretaries
could transform themselves from being seen a barrier to becoming an
enabler to the board, proposing business-friendly solutions rather than just
raising alarms on compliance issues.
Increasing the visibility One of the reasons why the role of a company
secretary might not be highly regarded is because not everyone in an
organisation knows exactly what a company secretary does. By developing
people skills and communicating with other departments, company
secretaries can increase their visibility and at the same time add value by
assisting other departments on issues such as corporate governance.
Developing strategy skills Very few company secretaries manage to
reach the executive committee level where they would be involved in the
strategy development of the organisation, simply because they lack the
necessary strategic skills. To reach that strategic level and thereby gain a
higher status, company secretaries would thus need to move their focus from
administrative to strategic skills, in addition to developing people skills and
commercial acumen.
Changing the title The word secretary may unconsciously be
associated with the image of typist or administrative assistant, so
changing the title might help to boost the image of company secretaries. If
company secretaries develop appropriate strategic, people and commercial
skills and become high level board advisors, then their possible new titles
could include corporate governance director or chief governance officer.
This would also help to value the role of the company secretary as a standalone function, and would discourage the current practice of combining the
role of company secretary with that of general counsel, head of legal or
director of finance.
Ultimately, whether company secretaries gain a higher status will depend on

how the board values their role. Some boards might be reluctant to extend
the role of the company secretary beyond the administrative and compliance
aspects. As such, company secretaries recognition to a higher status will
depend on their ability to demonstrate that they can add value beyond
administrative efficiency, and that they can strike the right balance between
carrying administrative and strategic tasks.

Promoting Shareholder Engagement
In our current crisis-ridden economic landscape, much importance is being
given to shareholder engagement as an element of good corporate
governance practice, especially with respect to institutional investors like
investment firms, mutual funds and collective investment schemes.
Shareholder engagement - often coined as shareholder stewardship - refers
to shareholders' commitment to act as responsible owners of the company in
which they invest, and includes pursuing purposeful dialogues on strategy,
performance and risks with the board of the investee companies. Effective
shareholder engagement helps to reduce the riskiness of investments,
thereby promoting sustainable, long-term wealth creation, and ultimately
may help to maintain the financial soundness of an economic system.
Shareholder engagement is also about the regular monitoring of the investee
company,
which
involves
the
following:
(i) Attending general meetings of the investee company to discuss strategic
performance and risk issues, and keep records of votes cast at those general
meetings
and
of
the
reasons
behind
the
voting;
(ii) Addressing any corporate governance issues that may arise in the
investee
company
with
respect
to
the
following:
a. Transparency and performance - including the level and quality of
transparency, the company's financial and operating performance, significant
strategic issues, substantial changes in the financial or control structure of
the company, and the accounting and auditing practices of the company;
b. Board structures and procedures - including the role, independence and
suitability of non-executives directors, the quality of succession practices and
procedures, the remuneration policy of the company, conflicts of interest with
large shareholders and other related parties, the composition and adequacy
of the internal control systems and procedures, the composition of the audit
and
remuneration
committees;
and
c. Responsible investment - Giving appropriate consideration to
environmental, governance and social issues when taking decisions on
investments.
(iii) Establishing clear policies on how to exercise shareholders' rights,
especially as regards voting and when to intervene when there are concerns
about the investee's strategy or performance. Intervention methods could
include
the
following:
a. Holding additional meetings (apart from general meetings) with the
management
of
the
investee
company
to
discuss
concerns;
b. Holding meetings with stakeholders, like company advisors, banks,
creditors
etc;
c.
Meeting
the
chairman
and
independent
directors;
d. Intervening jointly with other shareholders on particular issues;
e. Submitting nominations for the appointment as director of the investee;
and
f. Adding items to agenda, submitting resolutions and requisitioning
meetings.
(iv) Mitigating conflicts of interests arising out of other business relationships
with the investee apart from that of being shareholder. This might include, for
example, situations where a director sits both on the board of the shareholder
and the investee.
There are several factors which can hinder the implementation of effective
shareholder engagement and therefore need to be addressed beforehand.
These
may
be:
(i) Short-termism - which is due to an over-emphasis on short-term
performance measures as a result of pressure from investors, analysts and an
increasingly competitive financial market to achieve rapid gains;
(ii) Complex and fragmented foreign share ownerships - which makes it
difficult
to
communicate
effectively
with
all
investees;
(iii) Excessive intermediation - the interposition of too many intermediaries
for a particular investment might result in a misalignment of objectives due
to the different business models adopted by asset managers. For example,
investment banks are remunerated on transactions, market makers on
trading, and fund administrators on volume of business, which is all at the
expense
of
shareholder
engagement;
and
(iv) Lack of human resources to monitor and enter into dialogue with the
investee company.
Shareholder engagement should not be considered as a mere compliance
exercise, but should instead be a proactive and consistent endeavour on the
part of shareholders to increase the long-term value of the company. The
implementation of shareholder engagement might be costly and timeconsuming to some investors, but in the long-term effective shareholder
engagement in fact results in higher and more sustainable investment
returns.

Managing corporate governance disputes
Corporate governance disputes refer to disputes relating to the boards
powers and actions, or its failure or refusal to act. This includes disputes
among members of the board, between shareholders and the board, or
between other stakeholders (employee and community representatives,
social activists etc) and the board. If not managed effectively, these disputes
can lead to costly legal suits and can have disastrous effects on a companys
reputation, operations and market value. It is thus imperative for the board to
devise appropriate policies to manage corporate governance disputes.
Before devising appropriate policies for managing corporate governance
disputes, the board needs to be aware of the causes of such disputes.
Corporate governance disputes may arise in the following situations:
Board disputes
i.
Adopting new business strategies directors views on the choice and

implementation of new strategies may differ and lead to disputes;
ii.
Crisis situations (e.g. company being in bad financial conditions,

restructuring exercises, employee strikes etc) each board member may
have his/her own view on how to respond to a crisis situation, which may
result in board disputes;
iii.
Changes in board composition having a significant number of new

board members or board members appointed by dissident shareholders can
increase the risk of creating board disputes, as the directors can take some
time before being able to work together and understand each others views;
Shareholder disputes
iv.
Shareholder activism shareholders are now becoming more and more

concerned about the boards performance, remuneration and bonuses of
directors and senior executives, nomination of directors, the quality of
disclosure of financial information by the board, and compliance with
corporate governance best practices. If shareholders are not satisfied with
the afore-mentioned, disputes may arise between shareholders and the
board;
v.
Mergers and acquisitions the ensuing changes in the business

structure, culture and dynamism, and the terms and conditions of the merger
and acquisition can be a source of dispute among directors and shareholders;
vi.
Share and bond valuation shareholders may not agree with the
valuation of shares and bonds, especially when these are undervalued, and
this may lead to shareholder disputes;
Stakeholder disputes
vii.
Corporate social responsibility social, environmental, employment

and ethical issues may be a source of dispute between stakeholders and the
board, especially if the activities of the company adversely affect the
community at large; and
viii.
Cross-border operations the social and cultural differences of a

particular foreign country in which a company is established may increase
the risk of stakeholder disputes.
Corporate governance disputes policies can be classified into internal policies

(for managing board disputes) and external policies (for managing
shareholders and stakeholders disputes). Such policies may include the
following:
Internal policies
i.
Establishing appropriate board processes which includes establishing

and observing appropriate protocols for conducting meetings, defining
procedural rules and behaviour expectations of board members, and
encouraging discussion, debate and deliberation among board members;
ii.
Improving communication among board members creating

opportunities for board members to meet in informal settings, like dinners or
cocktails. This will help board members to know each other personally and
express their views and thoughts with each other;
iii.
Training board members on dispute resolution techniques these

techniques include the ability to focus on factual information and constructive
ideas, thereby eliminating emotional issues from discussions, active listening
skills, the promoting of discussion and free flow of ideas, and being able to
encourage collaboration, flexibility and respect of opinions;
External policies
iv.
Appointing specific board members or sub-committees to hold regular

meetings with shareholders and other stakeholders to hear their views and
complaints;
v.
Monitoring shareholders and stakeholders interests and activities so

as to understand their priorities and concerns, and to proactively address
those concerns;
vi.
Improving regular disclosure and communication of financial

information and information on sustainability and other corporate social
responsibility issues;
vii.
Responding to shareholders and stakeholders questions and concerns

quickly and effectively as they arise;
viii.
Improving on community outreach and corporate social responsibility

activities;
ix.
Incorporating alternative dispute resolution clauses in shareholder

agreements so as to encourage mediation and arbitration to resolve
shareholder disputes, rather than going through time consuming and costly
legal suits; and
x.
Obtaining advice from an alternative dispute resolution expert on the

most effective and efficient dispute resolution alternative when faced with
corporate governance disputes.
Devising appropriate policies is not enough as an effective management of

corporate governance disputes also entails the consistent implementation of
those policies, which is a challenging task. The chairman of the board as such
needs to encourage the consistent implementation of the corporate
governance disputes policies among board members, and continuously
monitor the effectiveness of those policies and of their implementation

Setting the right compliance culture
In the absence of a right compliance culture, an organisation can be prone to
unethical behaviours. The consequences of these unethical behaviours can
prove to be disastrous to a companys reputation and viability, and can make
a financial system unstable. Recent banking scandals are evidence of this. As
a response to these scandals, regulators around the world are starting to put
pressure on organisations to clamp down on unethical behaviours and to set
the right compliance culture. It is thus imperative that Boards start taking
responsibility for setting up an effective and sustainable compliance culture.
The main problem that organisations face is not actually an absence of
compliance culture, but rather that the culture in place is dysfunctional.
There are several reasons why a compliance culture may be dysfunctional,
including the following:
i.
A rules-based approach to compliance whereby compliance issues are

treated as mere steps in a mechanical process and tick-box exercise, rather
than being a continuous and strategic process to guide decision making,
behaviour and the conduct of business;
ii.
Doing the Minimum attitude which focuses only on complying with

the minimum requirements of laws and regulations and overlooks the wider
impacts of the behaviours and attitudes within the organisation;
iii.
Seeing compliance as a quantitative requirement (how much needs to

be done in order to comply with the word of the law), rather than a
qualitative one (how it needs to been done in order to comply with the spirit
of the law and change organisational behaviour positively);
iv.
Creating the wrong environment whereby compliance is presented as

a routine, periodic process, and the compliance trainings lack sufficient
creativity and instructional design to engage employees in the compliance
process. Compliance is then seen as being pushed upon employees and this
creates a negative environment which is counterproductive to an effective
compliance culture.
v.
An absence of organisational values or values which have not been well

articulated - which means that employees do not have a benchmark against
which they can measure their actions, decisions and behaviours in the
organisation.
Setting an effective and sustainable compliance culture is an on-going
process and requires continuous effort from all levels of an organisation.
Changing a companys culture is even more challenging when bad attitudes

and behaviours become embedded in the companys culture. Such
companies might then need a structural reform, change of leadership or a
complete review of the companys processes and systems. Setting the right
compliance culture may as such be a daunting exercise, but in the end it
promotes ethical soundness in the organisation, which in turn increases its
image and competitiveness.

The shift to paperless meetings
Most directors know all too well about the trouble of carrying and going
through heavy and cumbersome board packs during and after board
meetings. Company secretaries also usually complain about the hectic,
tiresome and stressful process of preparing timely board packs for all
directors. It is no wonder then that some companies have tried to figure out
an alternative to the time and resource consuming, traditional method of
preparing paper board packs, thereby shifting towards paperless meetings.
The implementation of paperless meetings for some companies is also a
result of the go green movement which is becoming more and more popular
nowadays. Paperless meetings are indeed becoming such a craze now that,
at one point in time last year, there was a shortage of Apples Ipad the
tablet most commonly chosen for paperless meetings due to high demands
from companies.
The reason behind the success of paperless meetings lies in the benefits and
added value that they bring to both directors and secretaries, which are as
follows:
i.
ii.
iii.
iv.
v.
vi.
Directors do not need to carry cumbersome board packs, especially

while travelling. They only need to bring their tablet, like Ipad, in which all
documents and information would be uploaded in real time on virtual board
platforms such as Boardpad. The absence of paper board packs also implies
more space on the table, which makes for a more comfortable environment
for directors;
There is an increase in the quality of information available to the board
as last minute revisions and updates to documents can be uploaded on the
virtual board platform in real time and the information is available to the
directors on their tablet, even if they are offline and travelling. This means
that directors continuously have access to company and board information,
thereby helping in effective decision-making;
The transition to paperless meeting is usually smooth as minimum
training is required. This is because most software applications for virtual
board platforms are user-friendly and intuitive, and can store high volumes of
corporate data. As such company secretaries and directors get used to
paperless meetings very quickly;
Features such as annotation, comment, circling, amending etc, are
available on most virtual board platforms, which means that directors would
be able to annotate, comment and correct documents just as they would
have done with paper board packs;
There is an increase in the productivity and efficiency for the
preparation of board packs, as there is no need to go through the cost
ineffective process of mobilising a large number of staff for the printing,
organising and arranging of piles of papers into board packs;
There is a quicker and more efficient delivery of board documents as
there are no delays due to problems with printers or with the despatch of
documents; and
vii.
Adopting paperless meetings is also a step forward to being more

environmental friendly by reducing paper usage, thereby improving the
image of the company in terms of its corporate social responsibility.
Paperless meetings bring more value-added when the technology of virtual
board platforms is used in a dynamic way and as a tool for managing and
exploiting documents - which then improves the dynamics and decisionmaking of the board - rather than using it just as an e-reader for posting
documents. Uploading too much documents on the virtual board platform
may also overwhelm directors with too much information, which is then
detrimental to effective decision-making. Another concern with paperless
meetings is the security of confidential data on the virtual platform being
used, but this can usually be addressed by creating trusted business
relationships with the virtual service providers. As such, there seems to be a
general consensus that, despite some scepticism about its real benefit and
viability, paperless meetings make the lives of directors and secretaries
easier.

Board Development
The board is the focal point of a company from which all strategic decisions
emanate, and whose performance directly impacts on the success of a
company. Boards are, therefore, constantly under the pressure from
stakeholders to perform better, through board development. Board
development refers to the revamping of the structure, processes and
dynamics of the board, as well as encouraging proper attitude, behaviour and
commitment from the part of all board members.
Ideally, in the quest for board development, the board should target to
achieve the following with respect to its structure, processes and dynamics:
i.
ii.
iii.
iv.
v.
vi.
reach appropriate decisions which are aligned with the strategy of the
company and support the implementation of these decisions;
allocate sufficient time for reflection and consideration of alternatives
during the decision-making process, thereby refraining from impulsive
reactiveness to situations;
demonstrate situational intelligence that is, being able to identify the
expectations of all stakeholders and recognising that these expectations will
change according to differences across cultures, business environments and
regulatory regimes. It also involves a deep understanding of the individual
strengths of the board members and knowing how to deploy them in the
most effective and efficient manner in every situation;
being able to balance commercial imperatives and short-term
performance with corporate responsibility and long-term stability. This also
involves being able to achieve a satisfactory return on investments, both
quantitatively (in terms of profits) and qualitatively (creating welfare for and
bringing added value to all stakeholders);
perform effectively through efficient use of technology, like virtual
board processes, and combine independent challenge from all board
members and avoid power being concentrated in the hands of one individual
or group; and
constantly assess the impacts of its strategic decisions and actively
reflect on the individual and collective performance of its board members.
As for the attitude, behaviour and commitment of board members, board
development should target eliminating the following:
i.
ii.
iii.
wasting time and energy into repetitive and pointless governance

reviews, committee restructuring, re-organisations, thereby diverting
attention from the real and more important issues, like the non-performance
of board members;
stifling creativity, smothering imagination and preventing action by
focusing too much on procedures and processes;
being dismissive of new ideas and different points of views, and being
adamantly resistant to change this will result in the board operating in a
iv.
v.
vi.
vii.
viii.
ix.
x.
closed vacuum, thereby missing opportunities from new ideas and

constructive change;
belittling and intimidation of board members, which closes the door to
open discussions and participation by all board members;
over-possessiveness by board members who believe that the
organisation cannot survive without them and who, in doing so, prevent the
organisation from moving on;
long-serving board members who are veterans in the company but who
rarely contribute to board discussions, and are only there to achieve quorum;
members who serve on so many committees and are directors in so
many organisations that they are never sure in which meeting they are
coming and complain about their busy schedule during the meeting instead
of contributing to discussions;
board members who look at each issue from every conceivable, and
sometimes unimaginable angle, challenge every little proposition and raise
irrelevant issues, thereby paralysing the boards decision-making process;
members who have their own hidden agendas and for whom promoting
the success of the company is not necessarily their priority; and
over-admiring board members, who will never question the
performance of other board members, and whose contribution to the board
discussions is limited to expressions of gratitude and admiration.
Promoting board development can be a difficult task, especially when the
board does not have an enthusiastic learning culture and there is resistance
from board members. As such, the chairman has a pivotal role to play in
overriding the difficulties in promoting board development by fostering
enthusiasm for board development in all members. The company secretary
also has a supportive role in the implementation and organisation of board
development, namely by helping the board in the development of its
objectives, suggesting innovative development opportunities and monitoring
the whole development process. Above all, board development needs to be
pragmatic, produce real change, and be adaptive to the boards special
needs, for it to be successful.
The evolution of the Company Secretary

Company secretaries have always been an important part of a companys governance structure.
However, in the past few years there has been a noticeable change in the job description of
company secretaries in terms of their title, roles and qualities. This has been mainly due to
increased expectations on company secretaries in terms of ensuring good corporate governance
and thereby avoiding corporate scandals and boardroom failures.
Job title
Due to the negative clerical perception associated with the nomenclature company secretary,
some organisations are now renaming the job title as governance professional, governance
director or even chief governance officer. This change in job title and the ensuing
responsibilities promotes the raising of the status of the company secretary, who is now being
considered on an equal footing with other officers of an organisation.
Roles and responsibilities
Company secretaries are expected to be polymaths, as they need to have a wide knowledge on
several aspects and need to play the following roles concurrently:
1.
Trusted board advisor company secretaries are expected to be the confidential sounding
board and advise the chairman and the board on legislative, regulatory and governance
requirements, including disclosure requirements and effective board practices.
2.
Communications and liaison officer the company secretary is the main point of contact for
the chairman, board members, shareholders and other stakeholders and has therefore an
important role to play in terms of communication and liaison.
3.
Overall governance professional the company secretary needs to ensure that the company is
complying with all legal, regulatory and corporate governance requirements.
4.
Watchdog company secretaries are expected to point out any issue or shortcomings with
respect to any non-compliance with laws/regulations or issues with shareholders or stakeholders to
the board. In their capacity as liaison officers, company secretaries are well-placed to be the
watchdog of the organisation as they can receive feedback from board members, shareholders and
other stakeholders.
Qualities and attributes

To fulfil the above roles and responsibilities, company secretaries should possess certain qualities
and attributes. These are:
1.
Integrity and trust the company secretary has access to very confidential information on the
organisation and therefore there is a high expectation in terms of the integrity of the company
secretary and whether the latter can be trusted by the board.
2.
Deep understanding of the business and thorough knowledge of legal, regulatory and
corporate governance requirements.
3.
Boardroom presence and emotional intelligence the company secretary should be confident
enough to raise issues at the board, but at the same time he/she should be patient, tolerant and
humble so as to get a point across without offending any director.
4.
Independence the company secretary can be overwhelmed with pressure and feedback from
several parties including board members, shareholders and other stakeholders. However, he/she
needs to have an independent view and raise any issues which jeopardise the good governance of
the organisation.
In light of the above, it is clear that the expectations on company secretaries are high and that
their roles and responsibilities are beyond the traditional tasks of minutes taking and meeting
organisation. Company secretaries of today should thus ensure that they acquire and develop all
the required qualities to enable them to fulfil their duties effectively and efficiently.
The changing role of the company

secretary
Focus on governance
As the importance of effective corporate governance continues to be critical
in todays environment, not least due to the global financial crisis, there has
been increased focus on the role of the company secretary in Ireland.
Corporate Secretarial Services assists clients to manage and mitigate risks of corporate noncompliance. Innovative techniques coupled with years of professional experience help ease
administrative burdens across functional and geographical boundaries.
Introduction
Most notably, the Companies Bill 2012 recently retained the need for a company secretary in
both private and public companies. The responsibilities of the modern day company secretary
have evolved from that of a note taker at board meetings or administrative servant of the
Board to one which encompasses a much broader role of acting as Board advisor and having
responsibility for the organisations corporate governance.
The Board, particularly the chairman, relies on the company secretary to advise them not only on
directors statutory duties under the law, disclosure obligations and listing rule requirements but
also in respect of corporate governance requirements and practices and effective board
processes. This specialised role of the modern company secretary has emerged to position them
as one of the key governance professionals within the organisation.
Statutory responsibilities
The Companies Bill 2012, which was published last December and is
expected to be enacted at the earliest in 2014, retains the requirement
for a company secretary unlike the UK legislation which eliminated
this requirement for private companies in 2006. The retention of this

requirement demonstrates the importance of the role of the company
secretary in the eyes of the legislature and in fact the proposals go a
step further by placing the responsibility on the Board of directors to
ensure that the secretary has the requisite knowledge and experience
to discharge the functions of secretary of the company and to
maintain the records as required by the Bill. Furthermore, the
company secretary will be required to sign a declaration
acknowledging the existence of the secretarys duties on appointment.
If one were to examine the role and duties of the company secretary as currently outlined in Irish
legislation it would appear to be quite restrictive and mainly administrative in nature. Principally,
the company secretary ensures the company complies with company law, maintains certain
statutory registers and makes the necessary filings with the Registrar of Companies such as
annual returns, financial statements and certain forms with respect to changes to share capital
etc.
Corporate governance
In practice, the role of the company secretary has developed into much more than the basic
statutory requirements outlined above. Most notably, the responsibility for developing and
implementing processes to promote and sustain good corporate governance has fallen largely
within the remit of the company secretary. This is recognised in both the UK Code of Corporate
Governance (which has been adopted by the Irish Stock Exchange through the Irish Annex) and
the FRC Guidance on Board Effectiveness. Both have served to focus companies on Board
effectiveness and in turn how they can be assisted by the company secretary. Although this
guidance applies to listed companies, it is seen as best practice and these standards of
corporate governance should be adopted by other companies in so far as they are considered
appropriate to the nature and scale of the organisation.
The dynamics of the boardroom are changing and chairmen and directors are realising that they
need specialist skills and technical knowledge in this area and they are looking to company
secretaries to provide this expertise. There are a number of responsibilities, some of which have
been explicitly referenced to in the above guidance, where the company secretary can assist and
add value:
Organisational governance
It is important that robust governance arrangements are in place, are clearly documented and
communicated to the organisation. The position of the company secretary enables them to have
a holistic view of the governance framework and as a result they are generally tasked with the
responsibility of ensuring that this framework and any supporting policies and procedures are
clearly documented. This should include ensuring that the formal documentation required under
the UK Code of Corporate Governance, such as schedule of matters reserved for the Board, is in
place.
Supporting the chairman

The company secretary has a duty to advise the Board, through the chairman, on all governance
matters. Together they should periodically review whether the Board and the companys other
governance processes are fit for purpose, and consider any improvements or initiatives that
could strengthen the governance of the company. The relationship between the company
secretary and the chairman is central to creating an efficient Board.
Board and committee processes
The company secretary plays a leading role in good governance by helping the Board and its
committees function effectively and in accordance with their terms of reference and best practice.
Providing support goes beyond scheduling meetings to proactively managing the agenda and
ensuring the presentation of high quality up-to-date information in advance of meetings. This
should enable directors to contribute fully in board discussions and debate and to enhance the
capability of the Board for good decision making. Following meetings the company secretary
should pursue and manage follow up actions and report on matters arising.
Board development
All directors should have access to the advice and services of the company secretary. The
company secretary should build effective working relationships with all board members, offering
impartial advice and acting in the best interests of the company. In promoting board development
the company secretary should assist the chairman with all development processes including
board evaluation, induction and training. This should involve implementing a rigorous annual
Board, committee and individual director assessment and ensuring actions arising from the
reviews are completed. Further, the company secretary should take the lead in developing
tailored induction plans for new directors and devising a training plan for individual directors and
the Board. Although these tasks are ultimately the responsibility of the chairman, the company
secretary can add value by fulfilling, or procuring the fulfilment of, these best practice
governance requirements on behalf of the chairman.
Communication with stakeholders
The company secretary is a unique interface between the Board and management and as such
they act as an important link between the Board and the business. Through effective
communication they can coach management to understanding the expectations of, and value
brought by the Board. The company secretary also has an important role in communicating with
external stakeholders, such as investors, and is often the first point of contact for queries. The
company secretary should work closely with the chairman and the Board to ensure that effective
shareholder relations are maintained.
Disclosure and reporting
In recent years there has been increased emphasis in the quality of corporate governance
reporting and calls for increased transparency. The company secretary usually has responsibility
for drafting the governance section of the companys annual report and ensuring that all reports
are made available to shareholders according to the relevant regulatory or listing requirements.
Increased burden of
regulation
In the light of economic developments in recent years stakeholders of companies, particularly in
the financial services sector, are increasingly concerned with the conduct of the affairs of the
company and therefore it is essential that best practice is adhered to at all times and evidence is
available to demonstrate same. The requirement for higher standards in this sector can be
further evidenced by the introduction by the Central Bank of a series of corporate governance
codes including fitness and probity standards for certain pre-approval controlled functions or
persons who perform controlled functions. Controlled functions include ensuring, controlling or
monitoring compliance by a regulated financial service provider with its relevant obligations.
While the monitoring of compliance in the financial services sector has traditionally been
outsourced with the introduction of these new standards there is more caution in the provision of
such services which are more likely in the future to be laid at the feet of the company secretary.
It is true to say that the role of the company secretary also includes keeping the Board informed
of new legislation and how it applies to them. With this increased focus on corporate governance,
the role of the company secretary has been extended such that the secretary is now seen as the
guardian of the companys compliance with legislative requirements and best practice.
Conclusion
The focus of the company secretarys responsibilities will differ depending on the type of
company, whether it is public or private, and also depending on the industry. No matter what the
organisation however, the role has expanded beyond simply ensuring statutory compliance to
become a pivotal one where the skills of the company secretary can have a direct impact on the
effectiveness of the Board and organisation. Company secretaries can add real value to their
role and increase their impact by bringing commercial acumen, strategic understanding and
softer people skills in addition to their already much sought after legal and governance
knowledge.

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