NEWS | A new report published by the ICSA working with the Henley Business School shines light on the importance of the Company Secretary and aids in clearly defining the role’s relationship to effective governance.
ICSA in collaboration with Henley Business School has recently published a detailed report titled The Company Secretary – building trust through governance. The report draws on key research led by professors Andrew and Nada Kakabadse and explains how high performing company secretaries are able to contribute to good governance through helping to build a strong element of trust.
“It is a role of profound influence where you really are the eyes and ears of the Chairman and in many ways the confidante to the board. So a smart company secretary is going to define their role differently company by company, board by board,” explains Professor Kakabadse.
You can hear Peter Swabey and Professor Kakabadse introduce the report and give an excellent overview of the findings in this video.
Company Secretaries – “the ultimate point of reference”
In their study, the authors personally interviewed over 200 company secretaries, chairmen and advisers. The resulting report includes direct quotations and draws effectively on the views and professional experience of the participants to give a practical insight into the role of the Company Secretary. The report provides candid insights into the challenges of the role, as well as the many associated benefits and opportunities.
Once under the microscope it became clear that in reality the role of Company Secretary is one that when fully realised should have great value and vary according to the needs of different organisations.
The report challenges the long-held belief that the Company Secretary merely administrates and implements the decisions of the board. Professor Kakabadse goes so far as to describe the Company Secretary as the “ultimate point of reference” for anyone looking to gain a deeper understanding of a company’s inner workings, history and philosophy. The Company Secretary provides the clearest view on their business environment.
“That’s the person that can probably best guide you through the jungle of strategic debate, political relationships, political interactions…”
Challenges of being a Company Secretary
With the role of boards becoming more complex and their responsibilities growing each year, the function of the Company Secretary has adapted accordingly.
“The company secretary is the one that facilitates the relationships so that overview can be taken effectively.”
The research presents the role as one that acts as a vital intermediary between executive management and the board to streamline the goals of the company. The effectiveness of the board in part hinges on the work of the Company Secretary and the suggestion is made that this could and perhaps should become even more crucial in the future.
In order for the Company Secretary to best contribute, he or she must have their role understood and supported by the Chairman and maintain an open line of communication at all times with all members of the board.
Key findings on the role of the Company Secretary
Overall, the in-depth report identified 12 key findings on the role of the Company Secretary which are now summarized here:
- The role of the company secretary is much more than just an administrative position.
- Company secretaries are ideally placed to align the interests of different parties.
- The skills and attributes of the best company secretaries are closest to those of the Chairman: humanity, humility, high intelligence, and understanding of agendas, negotiation and resilience.
- It is vital that company secretaries have both direct and informal access to board members whenever needed.
- Maximising effectiveness requires that the Company Secretary’s direct reporting line should be to the Chairman.
- The role is changing: it is increasingly outward.
- ICSA-qualified company secretaries deliver a more rounded governance and board member service than those who have come to the role via other professional routes.
- There is a conflict of interest in the combined ‘Head of Legal (or General Counsel) and Company Secretary role.
- Board members often have a lack of awareness of the ways in which the company secretary supports an organisation in its decision-making.
- Company secretaries are often the longest-serving members present at board meetings.
- Company secretaries are embedded in the process of making boards more effective.
- The breadth of the company secretarial role includes additional responsibilities such as being an officer of the company, Chief of Staff to the Chairman and adviser to the board on governance.
Click on the link below to explore the 12 key findings further, download a copy of the full report, read related comment and see the events the ICSA are hosting on this research.