Navigating the Regulatory Maze: Why your organization should invest in a Company Secretary.
In Kenya, any private company with a paid-up capital of Kenya shilling five million or more is required to have a company secretary. A public company must have at least one company secretary.
A company secretary is a person or corporate body responsible for ensuring that an organization and its directors comply with legal and regulatory requirements and operate according to good corporate governance practices. Such a person must be certified by the Institute of Certified Secretaries.
The role of a company secretary varies depending on the jurisdiction, size, and nature of the organization, but their duties are well defined in The Companies Act 2015.
Below are several reasons why your organization may need a company secretary:
Legal Compliance
A company secretary ensures that the company complies with relevant laws, regulations, and corporate governance principles. This includes filing statutory returns, maintaining statutory registers, and ensuring that board meetings and shareholder meetings are conducted in accordance with legal requirements.
Corporate Governance
A company secretary plays a big role in promoting good corporate governance practices in the company. They advise the board of directors on their legal and fiduciary duties, help establish and maintain governance structures, and ensure transparency and accountability in decision-making processes.
Board Support
Company secretaries' support extends beyond scheduling meetings; it involves managing agendas and ensuring the provision of up-to-date information beforehand. This ensures directors' full engagement in board discussions, ultimately enhancing the Board's decision-making capacity. After meetings, the company secretary should actively pursue and oversee follow-up actions, as well as report on any matters arising.
Board Development
The company secretary plays a crucial role in advising the Board of Directors on its objectives and responsibilities, as well as guiding individual members in their roles. Furthermore, they are responsible for orienting, training, and briefing new board members, ensuring clarity and alignment with organizational goals. The CS should be involved in the annual assessment of the Board, its committees, and individual directors, and ensure that actions stemming from these evaluations are carried out.
Stakeholder Engagement
Company secretaries are the primary point of contact for shareholders, regulators, and other stakeholders. Their engagement with the stakeholders helps to inform the board’s decisions one way or another.
Ethical Conduct
Company secretaries uphold ethical standards and promote integrity and professionalism within the organization. They help develop and enforce codes of conduct and policies, monitor compliance with ethical guidelines, and investigate and address any breaches of ethics or misconduct.
Strategic Advice
Company secretaries offer strategic advice to the board and senior management on corporate governance issues, legal matters, and regulatory changes that may impact on the company's operations and long-term success.
In summary
It is prudent for any forward-looking organization to engage the services of a company secretary for compliance, good governance, and strategic advice among other services.
Your company may choose to have a company secretary as an employee or outsource from organizations offering such services depending on the needs and ability of the company. Their expertise and guidance will contribute to the overall effectiveness and sustainability of the company.
