The role of the cosec Flashcards
How has the status of company secretaries changed from 1948 to 1971?
What is the consequence of a cosec being an officer of the company?
CA1948 = Cosec is ‘an officer of the company’ and all companies must appoint one
Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] = Cosec is ‘chief administrative officer with extensive duties and responsibilities’
As an officer = cosec may be criminally liable for defaults committed by the company
What does s.271 CA2006 say?
What does s.270 CA2006 say?
Where does a cosec’s authority derive from?
Who can be appointed as a cosec and which forms are required?
S.271 = all public companies must have a cosec
S.270 = cosec is optional for private companies
Authority derives from employment contract (not from CA or legislation (like directors))
- An individual (form AP03)
- Corporate cosec = partnership or a limited company (form AP04)
What are the 3 main areas the duties of the cosec covers?
Name an example for each.
- The Board = provide practical support and guidance (particularly to NEDs) and ensure proper board procedures are in place/adhered to
- The Company = ensure company’s compliance with relevant legislations and codes of conduct
- The Shareholders = primary point of contact for shareholders and institutions related to corporate governance
What qualifications must a cosec of a private company have?
What does s.273 CA2006 say?
Private company = no need to have professional qualification or previous experience
S.273 = directors must take all reasonable steps to ensure cosec is a person who:
a. appears to have the requisite knowledge and experience to discharge cosec functions
AND
b. has 1 or more of the following qualifications:
- UK barristers, advocate, or solicitor
- A member of 1 of the 7 specified bodies = ICAEW, CIMA, CGI etc.
- Has been a plc cosec for 3 out of last 5 immediate years prior to appointment
- Appears to be capable according to the directors due to past experience or professional membership
Who is prohibited from being appointed as cosec?
A sole director can also be appointed as cosec (in ltd), but what is the disadvantage?
How is this resolved?
Auditor of a company and any employee of the auditor cannot be appointed
S.280 CA2006 = any documents requiring signature by a sole director and the cosec cannot be signed by the same person acting in both capacities
where 2 signatories are required (e.g. deeds) they would need to either appoint an authorised signatory or have an independent party witness their signature
What are the 2 ways a cosec can be appointed? (sections of the Act)
What are the 8 steps in the checklist for appointment?
a. Appointed with effect from date of incorporation by being named on Form IN01
b. Appointment made by directors in accordance with Articles and ss.275-8 CA2006
- Ensure appointee meets s.273 CA2006 qualifications (for plcs)
- At directors’ meeting or by WR, directors resolve to appoint (or replace) cosec
- Appointee formally consents to being appointed
- Particulars of appointee are entered in company’s register of secretaries and notified to Registrar using Form AP03 or AP04 within 14 days
- If cosec is to be an authorised signatory on company’s bank account = notification of the change of cosec and a specimen signature should be sent to the bank
- Formal service contract drawn up and signed by company and cosec (responsibilities, remuneration etc.)
- If company has an insurance policy covering officers against liabilities, insurance company should be notified of appointment
- If company has publicly traded shares, cosec should be supplied with company’s rules governing transactions in its securities (compliant with MAR, DTR, LRs etc.)
What are the 2 ways a cosec steps down from the role?
Does the removal of a cosec also terminate their employment contract?
What are the 4 steps in the procedure?
a. resignation = subject to any service contract, cosec may resign by notice in writing to the board
b. removal = board may remove cosec and replace them by simple majority
Only if their contract stipulates that they are specifically employed as cosec = removal doesn’t necessarily also require termination of employment
- For a removal = directors must approve resolution to remove cosec (at meeting or by WR)
- Registration/removal must be entered in register of secretaries and notified to Registrar using Form TM02 within 14 days
- If cosec was an authorised signatory on company’s bank account = notification of removal of cosec should be sent to the bank AND insurance policy notified (if applicable)
- For plc = a new cosec must be appointed as soon as practical
The UK CG Code recommends that the cosec report to 2 people. Who are they and for which aspects of the company secretary’s role would each have oversight?
In what 2 ways is the cosec’s independence safeguarded by the UK CG Code?
The chair on all governance matters and the CEO in respect of executive matters
a. appointment and removal of cosec should be a matter for the board as a whole
b. remuneration of cosec might be determined by remuneration committee
Who has authority to convene board meetings?
What are 4 benefits of electronic collation and distribution of board packs?
Any director may convene a meeting or request the cosec to do so
- Savings in time and cost
- Significantly enhanced levels of security
- Environmental benefits (less printing)
- Ability to issue updated reports directly to directors’ laptops or tablet devices
Name 5 things a cosec should do before a board meeting.
- Settle on agenda with chair/CEO = ask directors/SM if they wish to discuss something and consider items that come up on a recurring basis
- Issue a call for board papers in good time prior to deadline for issuing board packs
(Allows time for the reports to be reviewed, amended and the board pack itself compiled) - Send notice, agenda, and supporting papers to attendees = state time, date, and place of meeting (should ensure spare copies of the agenda and supporting papers are at meeting)
- Virtual meeting = Ensure all participants have necessary application/portal installed and are issued with invites and passwords (ideally set up a test call)
- Be familiar with quorum requirements and process for declaration/handling any conflicts of interest
Name 5 things a cosec should do during a board meeting.
- Record attendance and note anyone joining or leaving the meeting
- Ensure a quorum is present at the start of the meeting and an independent quorum whenever decisions are reached
- Take notes on actions decided by the board and decisions reached (+ justifications)
- Advice if the board were proposing to do something unlawful or contrary to Articles or regulations (UK CG Code, LR)
- Collect any confidential papers left behind
Name 4 things a cosec should do after a board meeting.
What are usually the 3 steps for preparing the minutes?
Is it good practice to permit directors to amend meeting minutes to reflect what they meant to say?
- Listed Companies = Draft announcement for board approval (and release via RIS once approved) e.g. approve accounts, dividend payment, appoint/resign director etc.
- Notify managers of any action the board requires them to take e.g. producing a report on a specific subject for their next meeting
- Note any item that has been deferred for future consideration
- Prepare the minutes of the meeting
a. Draft minutes sent to chair or CEO for comments
b. Draft minutes sent to every director present with a request that they return any comments by a given date
c. Final minutes distributed to all directors
No = alterations should be confined to what was said rather than what any particular director meant to say or, on reflection, would have preferred not to say
What does schedule 4 of CA2006 apply to?
What does schedule 5 CA2006 apply to?
What is the default method of communication between the company and shareholders?
Can companies send communication to members by electronic means only?
Can members, other than corporate members, send communication to the company by electronic means only?
Schedule 4 = sending documents and information to a company
Schedule 5 = company communications to its members and any other company
Hard copy
Only if the members have opted in and supplied an address for that purpose - they still have the right to request a hard copy free of charge
Only if the company has agreed (or deemed to have agreed e.g., s.333 CA2006) and supplied an address for that purpose
Under s.1147 CA2006, when are the following documents sent by a company deemed to have been received:
- Documents sent by post?
- Documents sent in electronic form?
- Documents available on a website?
- 48 hours after posting providing company can prove envelope was properly addressed, postage paid, and was actually posted
- 48 hours after they were sent provided the company can prove they were properly addressed
- when published on the website or, if later, when the recipient received, or is deemed to have received, notification that the documents were available on the website
When is website communication by a company permitted? (2)
What must the company do following website communication?
Only where:
a. company has reasonable expectation that the recipient will be able to read it with the naked eye and retain a copy
b. the recipient has given consent or deemed to by failing to respond to consultation in accordance with Schedule 5 CA2006
Company must notify recipient that it has made document or information available on website
