At big corporations, few of the faces around the boardroom meeting table have more first-hand knowledge of the company’s history than the corporate secretary. But if you look at this role as purely administrative, Kuberno’s Jay Dodd argues, you’re missing out. Is it time to think about what’s in a name?
Names can fundamentally change the way we think about things. How an organization describes certain functions is a reflection of the value it attributes to those roles. Who would have known just two decades ago, for example, that positions that emerged in the wake of new regulatory directives would have led to data protection officers in the C-suite of many large corporations today?
Given the ever-expanding duties that fall under the umbrella of the company secretary, encompassing strategic responsibilities from succession planning to crisis management, and a sharper focus on governance in the round, large corporations in the U.S. and around the world are increasingly realizing that the company secretary is in a key position to influence strategic decision-making and therefore merits greater prominence within their organization.
This growing realization has prompted an emergence of new job titles, such as governance director or chief governance officer. However, this is not simply a question of a change for the sake of change. Instead, this is a means of signaling a new corporate mindset, where companies reaffirm their commitment to the highest possible governance standards.
From note-takers to strategic advisers
The role of the company secretary in times gone by has been mostly limited to largely administrative tasks, such as maintaining the share register and other corporate documents, taking the minutes at board meetings and producing reports for use at annual general meetings (AGMs).
Misconceptions surrounding the company secretary’s role have also persisted thanks in part to a lack of clearly defined responsibilities. In the UK, for instance, the Companies Act, which came into force in 2006, falls short of explicitly specifying the remit of company secretaries. Similarly in the U.S., the company secretary role is often viewed in narrow, administrative terms, with only limited expectations of this being an advisory role.
But in practice, company secretaries occupy a privileged and potentially highly influential position at the intersection of the board and the executive committee, giving them a unique perspective on business operations. They are responsible for advising the board on all governance matters and are also a key point of contact for the chairperson. This level of direct access to senior individuals is unmatched by other roles that exist in large companies and brings with it access to a wealth of knowledge.
In governance terms, large PLCs and multinationals are typically unwieldy beasts, relying on siloed internal structures to get to grips with sprawling worldwide operations. Unlike others in the business, the company secretary is obliged to have a detailed understanding of the full breadth of corporate functions and will therefore spend significant amounts of time getting to know all areas of the business. This allows them to gain a detailed yet strategic view of the entire company in a way their colleagues cannot. This holistic view and deep understanding of how the full suite of a company’s units knits together provides invaluable insights on which to base strategic guidance.
As the composition of boards tends to change more frequently, due to shifting business aims or external shocks, company secretaries will often find they are the longest-serving face in the boardroom. This means they will have the most extensive first-hand experience of the company’s history, with a deep appreciation of how what has gone before might have an impact on the future direction of the business. The company secretary is, therefore, often the voice of stability, steering senior teams through transitions, informed by the wealth of knowledge and experience at their disposal.
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Read moreDetailsThe ‘G’ in ESG
The rapid rise of environment, social and governance (ESG) up the corporate agenda has placed a significantly greater focus on governance-related issues. ESG considerations now feature more heavily in commercial decisions, such as valuations, compelling business leaders to focus more closely on their governance structures. Companies are under additional pressure to demonstrate their governance credentials, not just for ethical reasons but also because this is increasingly beneficial to the bottom line.
To demonstrate how highly they value the governance function as embodied by the company secretary, companies are beginning to embrace roles like governance director as a means of signaling to the market that governance is not just an administrative matter but also a key strategic pillar for their organization.
Some corporations are going further by seeking new ways to streamline some of the administrative duties of company secretaries to ensure they spend less time gathering data and more time harnessing this data to inform the strategic advice they can offer the business.
By publicly acknowledging the value they place on the often forgotten “G” and providing greater support to the governance function, companies also hope to be rewarded with more favorable ESG scores, higher valuations and ultimately increased revenues.
The company secretary of the future
Company secretaries are increasingly thinking beyond what it takes to meet minimum standard requirements on governance and are exploring new ways to run corporate legal entities more effectively. Issues like subsidiary governance frameworks are likely to remain high on their agenda, as large multinationals grapple with how to better understand what is happening at the fringes of their organizations and how to strategically optimize these operations.
The expansion of the company secretary’s role from administrative support to strategic governance necessitates a corresponding rebrand if it is to attract the caliber of applicant and level of internal support that such a wide-ranging and critical role demands. As companies begin to prioritize governance as a strategic pillar to boost their overall business strategy, embracing a rebranded company secretary function will be key to helping businesses both meet their ESG obligations and pursue new strategic opportunities.
Jay Dodd is co-founder and chief commercial officer of Kuberno, a governance platform provider.
