The office of the Company Secretary is a statutory position occupied by a principal officer of the Company, responsible for ensuring that the Company complies with statutes and regulations (where the incumbent is also the Compliance Officer), and also keeps the Board informed of its legal responsibilities. Company Secretaries have high-level responsibilities including advising on governance matters, corporate conduct within the regulatory environment, coordinating Board, Committee and General meetings, overseeing the training and development of Non-Executive Directors, liaising with regulators and interacting with shareholders and other stakeholders.
Historically, the functions of the Company Secretary were administrative and not concerned with the management of the Company. However, this 19th century view of the Company Secretary has since changed and has become increasingly out of step with modern reality. The Company Secretary, an officer of the company charged with significant governance and compliance responsibilities has clearly evolved to a key organ within the governance framework. In the case of Okeowo and ors v. Milgliore it was held that “a Company Secretary is the principal officer of the company”. By the provisions of Section 330 (1) CAMA 2020, every company other than small companies are required to have a Secretary.
As a key advisor to the Board with respect to matters of corporate governance and directors’ duties, the Company Secretary has a significant opportunity to help morph the conditions and environment for healthy boardroom culture and effectiveness. Principle 8 of the NCCG 2018 recognises the important role the Company Secretary plays in supporting the effectiveness of the Board by assisting the Board and Management to develop good corporate governance practices and culture in the company.
An effective board is one composed of Directors with appropriate skills and experience required to provide leadership and direction to ensure the Company is well managed to deliver value to stakeholders. This necessarily requires that directors have to receive continuous training and development, identify training needs and emplace a structured and robust Training Plan and budget. This should also include a comprehensive onboarding programme for new Directors.
Whilst the Chairman is expected to take the lead role in the assessment, improvement and development of Directors, the Secretary as the advisor and support system of the Board should prompt and support the Chairman in this regard.
On the assessment and evaluation of the performance of the Board and individual Directors, it is important for the Company Secretary to help the Board understand the value the evaluation can bring to the Board and work Directors and the Consultant engaged to undertake the evaluation to deliver on the value. The findings and recommendations from a well-structured board performance evaluation process can indeed be transformational and will assist the Board to set the agenda for the year ahead.
Another area where the Company Secretary plays a key role is with respect to Conflict of Interest. It is important that the Board considers and approves a Conflict of Interest Policy, as this is the most effective way to manage this hydra headed monster that can significantly impact board effectiveness. Conflict of interest is inherent in the position of Directors as fiduciaries who should not allow their own personal interest to interfere with those of the company they serve. However, personal interest can be limitless and range from financial gain, to the desire for professional advancement, recognition for personal achievement, and favours to friends and family.
Section 25.2 of the NCCG (2018) recommends that the concerned director be precluded from discussions and voting on any matter in which he/she may have an interest. The Director is also required to seek clarity from the Chairman of the Board or the Company Secretary when he/she is in doubt as to whether or not a conflict of interest exists. The Conflict of Interest Policy will provide clarity as to what constitutes a conflict of interest and the process for dealing with such a situation.
Ultimately, good governance hinges significantly on an effective Board supported by a professional and effective Company Secretary who ensures that the appropriate policies are in place and assists the board to identify and bridge knowledge gaps, oversees a periodic evaluation of the Board and individual directors, ensures that directors receive information in the right format, with enough time to read and digest to enable members come to meetings prepared and able to deliver on their mandate.
Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comments and reactions to [email protected]
