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Company Compliance & Administration > Chapter 1 - THE ROLE OF THE CO SEC > Flashcards

Chapter 1 - THE ROLE OF THE CO SEC Flashcards

1
Q

Name three key process responsibilities of a Co Sec?

A

Record and maintain records;

document decision making;

exercise processes;

prevent breaches of legislation;

advise Board on legal, compliance, governance matters and conduct of meetings;

act as liaison between Board and other stakeholders;

Oversee governance framework and ensure alignment with legal and ethicals obligations

Ensure Board functions well and has access to info required to make decisions

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2
Q

What types of company must appoint a Co Sec?

A

All public companies - s270 and 271; Companies Act 2006
Note - it is optional for private companies

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3
Q

What are the best practice guidelines / oversight for listed companies called?

A

UK Governance Code

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4
Q

History - first Co Sec mention in law

A

Joint Stock Act 1856

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5
Q

History - s177 Companies Act 1948 - definition of Co Sec

A

Authority to sign
Make statutory declarations
An Officer of the Company

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6
Q

History - 1971 court of appeals - definition of Co Sec

A

Full authority officer with extensive duties; can sign contracts and make representations

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7
Q

History - Companies Act 1980 - Co Sec role requirement

A

Must be a member of a professional body or have qualifications

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8
Q

What report published in 1992 outlined financial aspects of Corporate Governance is now the UK Corporate Governance Code?

A

The Cadbury Report

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9
Q

Who/what can undertake the duties of Co Sec ?

A

Natural person (appointed individual)
Corporate Services Company (multiple authorised signatories)
Partnership
LLP

…plus Assistant / Deputy

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10
Q

Key Co Sec AUTHORITIES (not specified in detail in Companies Act, although outlined)

A

Sign prescribed forms
Make Statutory Declarations
Sign Confirmation Statement

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11
Q

What other information is widely used and supplements the Companies Act 2006?

A

Model Articles

Companies Regulations 1985

The Company’s Articles (which set out provisions for the appointment of the Co Sec)

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12
Q

What three main areas does a Co Sec deal with?

A

The Board
The Company
The Shareholders

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13
Q

Co Sec > Board: 4 key responsibilities

A

Ensure proper policies and procedures are set and adhered to
Papers circulated in a timely and efficient fashion
Practical support to directors
Governance guidance

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14
Q

Co Sec > The Company: main areas of governance they are concerned with

A

Compliance
Codes of Conduct

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15
Q

Co Sec > Shareholders: main role

A

Primary point of contact from a governance perspective; also environmental standpoint

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16
Q

What Qualifications must the Co Sec of a private company have?

A

None specified in the Act or other guidelines

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17
Q

What Qualifications must the Co Sec of a public company have? (s273 of CA 2006)

A

Barrister / solicitor; OR
Member of professional body; AND/OR
Demonstrated experience; AND/OR
Held the role of Co Sec for a listed company previously

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18
Q

The Co Sec role focuses on compliance and governance, however the remit could be widened to what 3 other common areas?

A

Health & Safety, insurance, risk management

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19
Q

Who is prohibited to take on the role of Co Sec? (s1214 of CA 2006)

A

Auditor or employee of Audit firm

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20
Q

Could a sole director legally take on the role of Co Sec?

A

Yes - not prohibited, but cannot countersign (s280) - would need to have an additional authorised signatory or witness for key documents

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21
Q

What Form must be used to register the appointment of a Co Sec ON INCORPORATION?

A

IN01 (CA 2006 ss 12 & 16)

22
Q

How is a Co Sec appointed for an established company?

A

In accordance with CA 2006 (ss 275-278) and provisions in the Company’s Articles

23
Q

What 9 steps should companies take to formally appoint a Co Sec? (Listed Company)

A
  1. Ensure appointee meets qualification criteria (if required)
  2. Resolution / WR (incl replacement of previous Co Sec if required)
  3. Formal consent (form AP03 (individal) or AP04 (corporate entity)
  4. Enter details with Companies House / Registrar of Companies within 14 days
  5. bank account signatory (if agreed)
  6. annoucements
  7. draw up service contract (separate to employment contract; remuneration follwoing RemNom consideration)
  8. Add to D&O insurance policy
  9. Supply Co Sec with company’s rules governing transactions in its securities (listed)
24
Q

What form should be provided to the Registrar of Companies when providing consent and registering a Co Sec appointment IF IT IS AN INDIVIDUAL

A

Form AP03

25
Q

What form should be provided to the Registrar of Companies when providing consent and registering a Co Sec appointment IF IT IS A CORPORATE ENTITY

A

Form AP04

26
Q

What four key steps should be taken to remove a Co Sec following resignation or removal?

A

Board resolution or WR

Lodge form TM02 with Registrar (within 14 days)

Remove signatory status from bank (if reqd)

Appoint new Co Sec

27
Q

Generally how long are Companies given to notify the Registrar of changes

A

14 days

28
Q

According to the UK Corp Gov Code, who should the Co Sec report to on Board governance matters?

A

The Chair

29
Q

According to the UK Corp Gov Code, who can the Co Sec report operationally?

A

CEO or General Counsel

30
Q

Who are the two main people that the Co Sec should garner trust and confidence with?

A

Chair and CEO

(Other Directors can be managed.)

31
Q

In what general ways does a Co Sec act as an adviser?

A

Assist and guide Board to achieve company aims

Protect competing interests

Ensure governance procedures reflect corporate culture and values

Recording decisions

Guide decision making through meeting conduct and good processes; timeliness of info; clear recommendations and resolutions

Compliance / Governance / Legal / Regulatory matters

32
Q

Why must a Co Sec be trusted?

A

Heart of decision making process - records all decisions

Access to highly sensitive / confidential info

33
Q

Who can convene a meeting of the Board?

A

Any Director; or the Company Secretary (delegated by the Board)

Model Articles 9 & 8

34
Q

What processes should be undertaken BEFORE a Board meeting?

A

Circulate draft agenda (standing items plus others)
Create Final Agenda with Chair and/or CEO
Request reports by due date (allowing enough time for review)
Prepare / finalise reports and presentations
Confirm invitees, attendees and QUORUM
Confirm Conflicts of Interest

35
Q

What processes should be undertaken DURING a Board meeting?

A

Record apologies
Confirm meeting is quorate
Record discussions and actions
Record decisions and note majority voting / abstains if reqd

36
Q

What processes should be undertaken AFTER a Board meeting? Including one if for a Listed Company.

A

Prepare minutes
Record actions and any deferrals (matters arising at next meeting)
Circulate draft minutes and finalise ahead of next meeting
If Listed - announce relevant decisions surrounding shares, directors, approval of accounts etc via RIS

37
Q

What annoucements do listed companies make via RIS?

A

relevant Board decisions surrounding shares, directors, approval of accounts

38
Q

Do directors act as individuals?

A

NO - they act collectively as a board

39
Q

Which of these cannot be appointed as company secretary of a public company: company
secretarial manager of the company’s auditor, a chartered secretary or an unqualified
compliance officer?

A

Co Sec of Auditor or unqualified Compliance officer

40
Q

Which of these cannot be appointed as company secretary of a private company: company secretarial manager
of the company’s auditor, a chartered secretary or an unqualified compliance officer?

A

Company secretarial manager of the company’s auditor

41
Q

What is the basis of a company secretary’s executive authority?

A

Employment / service contract

42
Q

Why are there two appointment forms for a company secretary, Forms AP03 and AP04?

A

Form AP03 is for the appointment of a natural person, Form AP04 is for the appointment of a corporate company
secretary

43
Q

Are there any benefits for a sole director appointing a third party as company secretary rather than themselves?

A

The same person cannot sign documents in both capacities and so where two signatories are required, such as on
deeds, they would need to either appoint an authorised signatory or have an independent party witness their signature

44
Q

Does the removal of a company secretary also terminate their employment contract?

A

Only if their contract stipulates that they are specifically employed as company secretary

45
Q

The Governance Code recommends that the company secretary report to two people. Who are they and for
which aspects of the company secretary’s role would each have oversight?

A

The chairman of the board in respect of governance issues, CEO in respect of executive matters

46
Q

Who is authorised to convene meetings of the directors?

A

Any director may convene a meeting or request the company secretary to do so

47
Q

How might minutes of directors’ meetings differ between a regulated and unregulated company?

A

Minutes of a regulated company will often be more detailed and contain details of challenges, reviews and reports in the
decision-making process

48
Q

Is it good practice to permit directors to amend meeting minutes to reflect what they meant to say?
Yes / No

A

NO

49
Q

Can companies print documents in very small ‘fine print’?

A

No - legible to the naked eye

50
Q

Can companies unilaterally decide to issue their report and accounts by email only to their members?

A

No. Consent is required and members can elect to receive a hard copy

51
Q

A company has developed its own secure encrypted web technology which requires anyone using the service to
pay an annual subscription. Can the company use this platform to make its annual report and accounts available
to its members?

A

No. Copies of the report and accounts must be available free of charge when made available on a website

Company Compliance & Administration (16 decks)

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