Role of the Company Secretary Flashcards
What does S271 CA2006
CA2006 states that all public companies in the UK must have a company secretary.
What are the 4 key roles of the Company Secretary
Governance
Statutory and regularoy compliance
Advising the Board and Senior Mangement
Communictaion
Provide duties of the Co Sec under Governance - Board composition and procedures
Schedule of matters reserved for the board
Support for meetings
Ensuring appropriate insurance
Ensuring board committees are properly constituted
Supporting the board in succession planning
Provide duties of the Co Sec under Statutory and regulatory compliance
– Directors’ duties
* Supporting adherence to CA2006
* Share dealing
* Inside information
Provide duties of the Co Sec under Advising the board and senior management
– Good board practice
* Board and committee constitution and procedures
* Board evaluation
* Induction and ongoing training
– Statutory duties and responsibilities
– Commitment to Corporate Responsibility
– Commitment to Corporate Governance
Provide duties of the Co Sec under Communication
- Communicating all board decisions to management, regulators and other stakeholders
- Liaising with board members for all board events
- Primary point of contact with NEDs
- Ensuring board communication with shareholders
- Supporting in preparation of the annual report
Describe what is meant by the Company Secretary as the ‘Conscience of the company’
Advising the board on the right thing to do in the long-term interests of the company
Based on:
* Independence
* In depth knowledge of company
* Strong governance and ethical understanding
* Good relationship with the board
List 3 good reasons why a company should not outsource the role of the Company Secretary
- An in-house company secretary acquires an in-depth knowledge and understanding of the company and its history and also develops relationships with the board and management that an external firm lacks.
- An in-house company secretary is available at all times
- A qualified in-house company secretary offers a wide range of services and is able to take on other responsibilities in a start-up or smaller company.
List 2 reasons why a company should outsource the role of the Company Secretary
- To ensure that all of the statutory and regulatory requirements are met by a specialised firm.
- To reduce costs of employing a person with a specific qualification, especially in a company start-up.
How does the UKCG Code define the function of the Board
- ‘…promote the long-term sustainable success of the company, generating value for shareholders and contributing to wider society.’
List 10 matters reserved for the board
- Strategy and Management
– Responsibility for overall leadership of company - Structure and Capital
– Change in corporate or capital structure - Financial Reporting and controls
– Approving the annual report and accounts - Contracts
– Approval of major contracts and investments - Internal controls
– Approving the risk appetite of the company - Communication
– Approval of formal communications with shareholders - Board Membership
– Changes to the structure, size and composition of the board, following recommendations from the nomination committee. - Remuneration
– Determining the remuneration policy for the directors, company secretary and other senior executives. - Delegation of Authority
– Approval of the delegated levels of authority, including the Chief Executive’s authority limits - Policies
Approval of policies, including:
– Code of conduct
List 5 roles of the Chair
- Setting a board agenda primarily focused on strategy, performance, value creation, culture, stakeholders and accountability, and ensuring that issues relevant to these areas are reserved for board decision;
- shaping the culture in the boardroom;
- encouraging all board members to engage in board and committee meetings by drawing on their skills, experience and knowledge;
- providing guidance and mentoring to new directors as appropriate;
- leading the annual board evaluation, with support from the senior independent director as appropriate, and acting on the results; and
. What does the UKCG code and the FRC Guidance on Board Effectiveness say on the separation of the roles of the Chair and CEO
- ‘There should be a clear division of responsibilities between the leadership of the board and the executive leadership of the company’s business’.
Principle G, UKCG Code - ‘The roles of chair and chief executive should not be exercised by the same individual’.
- ‘A chief executive should not become chair of the same company.’
Provision 9, UKCG Code - ‘When deciding the differing responsibilities of the chair and the chief executive, particular attention should be paid to areas of potential overlap.’
FRC Guidance on Board Effectiveness
List 4 roles of an NED as set out in the UKCG Code
- Provide constructive challenge, strategic guidance, offer specialist advice and hold management to account (Principle H)
- Scrutinise and hold to account the performance of management and individual executive directors against agreed performance objectives (Provision 13)
- Have a prime role in appointing and removing executive directors (Code Provision 13)
- Through their participation in the nomination committee, lead the process for board appointments, succession planning and ensuring the development of a diverse pipeline (Code Principle J and Provision 17);
List 4 of the criteria of independence for NEDs under the UKCG Code?
- The non-executive director is or has been an employee of the company or group within the last five years.
- The non-executive director represents a significant shareholder.
- The non-executive director has served on the board for more than nine years from the date of their first election.
- The non-executive director has close family ties with any of the company’s advisers, directors or senior employees.
