Mohammad Shahid Farooqui FCS

Institute of Chartered Secretaries of Bangladesh (ICSB)

Lecture Synopsis-01
CS 501 (PART-A) Secretarial Practice (50 Marks)

ROLE AND DUTIES OF COMPANY SECRETARY

Secretary is one who is assigned with secrets. This is more important in the case of a
Company Secretary who is entrusted with classified matters of the Board on the one
hand, and with shareholders rights and interests on the other. Speaking truly, Company
Secretary is the overseer of all corporate affairs- statutory and administrative.
According to Companies Act, 1994 a Company Secretary means “any individual
possessing the prescribed qualifications appointed to perform the duties which may be
performed by a Secretary under the Companies Act and any other ministerial and
administrative duties”.
From the above definition it is clear that a Company Secretary is one who is an
individual or a person with prescribed qualifications. It is assumed that the person
appointed to this position (Company Secretary) should have the requisite knowledge and
experience to carry out the duties of a Company Secretary of a public company.
The Company Secretary’s role and duties are mostly constituted by the Companies Act.
That is why this position is also called the constitutional position. Globally the Company
law of most of the commonwealth countries makes it mandatory to appoint a Company
Secretary for the public Companies with objectives to ensure that the Board and the
Directors fulfill their statutory requirements and to meet the demanding standards of
corporate governance in companies.
London Stock Exchange is recognized the Company Secretary is an officer with a central
role in the governance and administration of Company affairs. Principles of Good
governance and Code of Best practices (the combined code) U.K. mentioned that-
“all directors should have access to the advice and services of the Company
Secretary, who is responsible to the board for ensuring that Board procedures are
followed and that applicable rules and regulations are complied with,. Any question
of the removal of the Company Secretary should be a matter for the board as a
whole”.
If we review the above, it is also clear that the Company Secretary plays an important
role in corporate management. The Company Secretary has a wide ranging responsibility
as a Senior Corporate Executive serving on the focal point for the communications with
Board, the Company and the Stakeholders. The Company Secretary also plays a key role
in the administration of important counsellors to the Board of Directors, CEO and
Management team.
Broadly the Company Secretary’s role can be divided into three major areas:
(1) For the Board of Directors
(2) For the Company
(3) For the stakeholders.

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Role towards the Board of Directors:
-To advise and assist the Board members/Directors with respect to their duties and
responsibilities as Directors and compliance with their obligations under the Companies
Act 1994, Securities and Exchange Commissions Rules, Listing Rules and Issues on
Corporate Governance.
-To act as a channel of communication and information to executive and non-executive
Directors.
Role towards the Company:
-To ensure that the Board decisions are properly executed and communicated by assisting
in the implementation of corporate strategies and policies.
-To ensure proper compliance with all relevant statutory and regulatory requirements.
Roles towards the Stakeholders:
-To make adequate communications with the stakeholders of the company with the
objective to ensure due regards and returns are paid to their interests.

CORE DUTIES OF THE COMPANY SECRETARY

The duties of the Company Secretary may vary from one company to another company
based on the size and volume of the business of the Company. The core duties of the
Company Secretary of a Company limited by shares are as follows:
1. To acquaint knowledge on statute:
The Company Secretary is an officer responsible for compliance with numerous legal
requirements under the companies Act, 1994 as applicable to companies. A Secretary is
responsible for performance of duties which is ministerial and administrative in nature.
The said Act has also specifically fixed the statutory responsibilities for compliance with
legal requirements. Further Securities Laws and Listing Rules have also emphasized the
duties of the Secretary.
In view of this, the Company Secretary should be aware of the following:
1. The provisions of the Memorandum and the Articles of Association of the
Company
2. The Companies Act, 1994
3. The Securities and Exchange Ordinance 1969, Securities and Exchange Rules
1987, Securities and Exchange Commission (Issue of Capital) Rules 2001,
Securities and Exchange Commission (Public Issue) Rules 2006, Securities and
Exchange Commission (Rights Issue) Rules 2006, Securities and Exchange
Commission Act-1993.
4. Banking Companies Act, 1991 and as amended in 2013.
5. Finance Act of the current fiscal year
6. Income Tax Ordinance-1984
7. Insurance Act-2010
8. Stock Exchange requirements i.e. Listing Rules.
9. Foreign Exchange Regulation Act 1947
10. Depositories Act 1999 and

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11. CDBL Rules and Regulation 2000 and 2003
12. Industrial Policy-2010
13. Stamp Act-1989
14. Trade Marks Act-1940
15. Industrial & Labor Act-2006 and as amended in 2013

2. Statutory and Compliance Matters

The responsibility of Company Secretary has also increased as he has been specified by
the Companies Act and allied acts as an officer who is in default and is liable to
punishment by way of imprisonment, fine or otherwise for violation of the provisions of
the Act which hold the officers in default liable.
The Company Secretary is responsible to maintain the statutory books and registers of
the Company. The various provisions framed under the Companies Act make it
obligatory for the Secretary to sign the annual return filed with the Registrar of Joint
Stock Companies and Firms, authenticate the Balance Sheet and Profit and Loss Account
and to make declaration before incorporation of a company confirming that all the
requirements of Act have been complied in respect of registration of a Company and they
may accept such a declaration as sufficient evidence of such compliance.
As a statutory/compliance officer of the Company - The Company Secretary must
ensure:-
a. any change in the company’s statutory information should be duly signed and
filed the returns with the Registrar of Joint Stock Companies and Firms within
the required period of time.
b. to advise the Board of Directors on the relevant dates for holding the
Company’s board meetings and general meetings.
c. to be aware of the disclosure requirements of the Stock Exchanges and
Securities and Exchange Rules.
d. to be familiar with the Securities Laws and Regulations with a view to advise
the directors on disclosure requirements.
It is the duty of the Company Secretary to ensure that any documents authenticated by
him represent the exact copies found in the statutory books and registers. The Company
Secretary will also ensure that corrected procedures are followed and adhered to in
accordance with the Companies Memorandum and Articles of Association and the
Companies Act. 1994.

3. Duties to the Board

Company Secretary is functionally responsible to the Board. As one of the corporate
experts, he/she renders the following services to the Board:
Advising the board on corporate governance principles and implementation of
programme to guide the directors in their duties, responsibilities and powers and make
directors aware of all laws and regulations relevant to the Company. This may include
advice on business ethics and good governance.
(I) Providing advice to the directors and officials in relation to the companies
Act, the articles of association, securities laws and other regulatory
requirements and any other statutory requirements.

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 (II) To ensure that the Board’s policies and decisions are properly communicated
to the relevant persons in the company and those pertinent issues from
management are referred back to the Board where appropriate.
(III) To develop a confident relationship with the chairman and to assist the
chairman in formulating priorities in the Board agenda for consideration by
the Board.
(IV) To arrange induction process of new Directors, encompassing both the
directors and its responsibilities in general and specific matters pertaining to
the Company.
(V) To identify training requirements for inexperienced directors and should also
ensure that there is an ongoing program to keep the directors well informed of
developments in the company and in respect of matters relevant to their
responsibilities generally.
(VI) To ensure that the Directors and Management operate within an authority
framework approved by the Board and reviewed and updated from time to
time.
(VII) To take responsibility for preparing all or parts of the annual report and
ensure that statutory deadlines are met and that the statutory and regulatory
disclosures are validated.
(VIII) To maintain the confidentiality about the Company and needs to act with tact
and direction at all times. The Company Secretary may not misuse
confidential information or disclose it to any third party in line with their
fiduciary duties as an officer of the Company.
(IX) To act in good faith and avoid any conflicts of interest.
(X) To ensure that appropriate guidance is given to the board on the above.

3. Management of Company Meetings

The success of Company Meetings mostly depend on the efficiency of the Company
Secretary. In this respect the Company Secretary —
a. is expected to know the basic principles of the law of the arranging meetings.
b. advises the board of Directors to convene its meetings.
Management of Company meetings is purely administrative and includes the following:
(I) To arrange and liaise with the Chairman and/or Managing Director in
connection with preparation of the agenda for the meetings
(II) To book and prepare the meeting room
(III) To prepare all papers relating to the meeting
(IV) To attend and take down notes of the meeting
(V) To follow up the decisions made.
(VI) To play an advisory role to the Chairman and the Board of Directors
(VII) To lodge statutory returns where applicable.
(VIII) The minutes and resolutions of the meetings should reflect the proceedings
thereof to be written accurately, concisely and in simple language.

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 (IX) All extracts of minutes and resolutions should be prepared in the Company’s
letterhead and certified by the Chairman of the Board and/or the Company
Secretary.
(X) A Company Secretary should table all Directors’ circular resolutions passed
since the previous board meeting at the next board meeting for notation.

4. Other Duties:
(I) The Company Secretary may be required to take responsibilities for the
administration and management of the Company’s pension and/or provident
fund in the capacity as principal officer, trustee or chairperson.
(II) The Company Secretary may be required to administer and manage a group
life assurance scheme on behalf of the Company’s employees.
(III) The Company Secretary may be required to administer and manage the
insurance portfolio and take some role in the Company’s risk related activities
in this context.
(IV) The Company secretary may take responsibility for the corporate social
responsibility portfolio. This would entail ensuring that the Company adheres
to its corporate social investment program and monitoring various aspects
directly and indirectly related to this activity, including the supervision of the
Company’s adherence to any industry or sector charter.

Company Secretary in Corporate Governance - Global Practice:

The Company Secretary has an important role in promoting good corporate governance.
In discharging his/her duties, The Company Secretary should consider the following as
an outline of his/her personal and professional responsibilities.
1. To establish an effective working relationship with the chairman and chief
executive officer, with accountability to the board (through the Chairman) for all
matters relating to Directors’ duties as an Officer of the Company.
2. To ensure the smooth running of the board’s and board committees’ activities by
helping the chairman to set agendas, preparing papers and presenting papers to
the board and board committees, advising on board procedures.
3. To keep under close review all legislative, regulatory and corporate governance
developments that might affect the Company’s operations, and ensuring that the
Board is fully briefed on these and that it has due regard to them when taking
decisions.
4. To ensure that the concept of stakeholders (particularly employees) is in the
board’s mind when important business decisions are being taken. Keeping in
touch with the debate on corporate social responsibilities (“CSR”) and
stakeholders, and monitoring all developments in this area and advising the board
in relation to its policy and practices with regard to CSR and its reporting on that
matter.
5. To act as a confidential and sound person to the Chairman, non-executive
directors and executive directors on points that may concern them, and to take a
lead role in managing difficult inter-personal issues on the board (such as the exit
of the directors from the business).

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 6. To act as a primary point of contact and source of advice and guidance for,
particularly, non executive directors as regards the company and its activities in
order to support the decision making process.
7. To act as an additional enquiring voice in relation to board decisions which
particularly affect the company, drawing on his experience and knowledge of the
practical aspects of management including law, tax and business finance. To act
as the “Conscience of the Company”.
8. To ensure, where applicable, that the standards and/or disclosure required by
Listing Rules are observed and, where required, reflected in the annual report of
the directors — the Secretary usually takes the lead role in drafting the annual
report and agreeing these with the board and board committees.
9. To comply with the continuing obligations of the Listing Rules and Codes on
Takeovers and Mergers and Share Repurchases, such as ensuring publications
and dissemination of Report and Accounts and interim reports within the periods
laid down in the Listing Rules; timely dissemination of announcements to the
market and ensuring that proper notification is made.
10. To maintain relations with investors, particularly institutional investors, with
regard to corporate governance issues and the board’s practices in relation to
corporate governance.
11. To induct new directors into the business and explaining their roles and
responsibilities.
12. To ensure that the board is fully aware of its responsibility to ensure that it does
not mislead the market by putting out or allowing the release of misleading
information about its financial performance or trading condition, by omitting to
state information which it should state, or by engaging in a course of conduct
which could amount to misleading the market.
13. To ensure compliance with all statutory filings and regulatory disclosures.
14. To arrange and manage the annual general meeting (“AGM”) Extra-Ordinary
General Meeting (EGM) and to deal with the items to be considered at the AGM
and EGM including resolutions dealing with governance matters.

Company Secretary’s pro-active roles at a glance-

DUTIES Pro-active
1. Board meetings
Coordinating the operation of the company’s formal decision making and Yes
reporting machinery.
Formulating meeting agendas with the chairman and/or the chief executive. Yes
Attending meetings. Yes
Preparing minutes for meeting. Yes
Maintaining minute books. Yes
Ensuring that correct procedures are followed. Yes

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 DUTIES Pro-active
2. Members’ meetings.
Originating documentation for circulation to shareholders. Yes
Coordinating the administration and minuting of meetings. Yes
Ensuring that correct procedures are followed. Yes
3. Memorandum & Articles of Association.
Ensuring that the company complies with its memorandum and articles of Yes
association.
Drafting and incorporating amendments in accordance with correct Yes
procedures.
4. General compliance.
Monitoring and ensuring compliance with relevant legal requirements Yes
particularly under the Companies Acts.
5. Stock Exchange requirements.
Ensure that the returns are duty filed. Yes
Releasing information to the market. Yes
Making applications for listing of additional issues of securities. Yes
6. Statutory registers.
Maintaining the following statutory registers:
Members. Yes
Company charges. Yes
Directors and secretary. Yes
Directors’ interests in shares and debentures. Yes
Debenture holders (if applicable). Yes
7. Statutory returns.
Filing information with the Registrar of Companies to report certain
changes regarding the company or to comply with requirements/or periodic
filing of particular importance in this regard are:
Yes
Annual returns.
Yes
Amended memorandum and articles of association.
Yes
Return of allotments.
Yes
Notice of appointment, removal and registration of directors and the
secretary.
Notices of removal or resignation of the auditors. Yes
Change of registered office. Yes
8. Report and accounts.
Coordinating the publication and distribution of the company’s annual report Yes
and accounts and interim statement in consultation with the company’s other
advisers and, in particular, preparing the directors’ report.

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 DUTIES Pro-active
9. Share registration.
Maintaining the company’s register of members. Yes
Dealing with transfers and other matters affecting shareholdings. Yes
Dealing with queries and requests from shareholders.
Yes
10. Shareholder communications.
Communicating with the shareholders (i.e. through circulars). Yes
Payment of dividends and interest. Yes
Issuing documentation regarding rights issues and capitalization issues.
Yes
General shareholder relations.
Relations with institutional shareholders and their investment committees. Yes
Yes
11. Shareholder monitoring.
Monitoring movements on the register of members to Yes identify any Yes
apparent ‘stake-building’ in the company’s shares by potential takeover
bidders.
Making enquiries as appropriate of members as to beneficial ownership of Yes
holdings.

12. Share and capital issues and restructuring.

Implementing changes in the structure of the company’s share and loan Yes
capital and devising, implementing and administering directors’ and
employees’ share participation schemes.
13. Acquisition and disposals.
Participating as a key member of the company team established to Yes
implement corporate acquisitions and disposals.
Protecting the company’s interests by ensuring the effectiveness of all
documentation and that due diligence disclosures enable proper commercial Yes
evaluation prior to completion of a transaction.
14. Corporate governance.
Reviewing developments in corporate governance and advising and assisting Yes
the directors with respect to their duties and responsibilities and compliance
with their personal obligations under company law and, if applicable, Stock
Exchange requirements.
15. Company seal.
Ensuring the safe custody and proper use of the company seal. Yes
16. Registered office.
The receipt, co-ordination and distribution of official correspondence Yes
received by the company at its registered office.
Ensuring the provision of facilities for the public inspection of company
documents. Yes
17. Subsidiary companies.
The administration of subsidiary companies. Yes
Implementing changes to, and maintain a record of the group’s structure.

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 DUTIES Pro-active
18. Legal.
Contracts negotiation. Yes
Contracts relating to freehold or leasehold property. Yes
Contracts in the ordinary course of business. Yes
Other contracts. Yes
Litigation. Yes
19. Personnel and employee benefits.
Employment law. Yes
Profit share schemes. Yes
Pensions administration & trusteeship. Yes
Personnel administration. Yes
Other employee benefits. Yes
Employee executive share option scheme. Yes
20. General management.
Strategic planning. Yes
Directorships of group subsidiaries. Yes
Liaising with other professional advisers. Yes

THE END