The Untold Value of a Competent Board Secretary

In my experience as a chairperson, a competent board secretary is absolutely invaluable, but surprisingly difficult to find – even with support of the myriad of AI tools available.

Many directors believe that a ‘board secretary’ is more “secretary” than board advisor, and that they do little more than write up the minutes.

My friend and colleague, Catherine Engmann, explains the issue very concisely in the forward of her ‘Reflective Journal for Strategic Company Secretaries’:

As a Company Secretary, your role is often seen as administrative ensuring compliance, coordinating board meetings, and keeping the wheels turning. But you’re more than that. You are a governance leader, a strategic advisor to the board and steward of organisational integrity.

Her description is absolutely spot on. Being a more strategic company secretary takes experience, deep knowledge of the nuances, contradictions and complexities in the Companies Act in their jurisdiction and a strategic mindset. Company secretaries are strategic advisors. They can save companies thousands and even millions of rand, dollars or pounds by helping them to avoid compliance mistakes, but also by understanding which guidelines are most appropriate for the market and context that the business finds itself in.

Often costly mistakes occur when a particular requirement is triggered but either through lack of awareness or wilful neglect, no action is taken until it’s too late and penalties accrue, or a summons is served. A simple example in South Africa is the registering of an annual return with the CIPC. If it is not done within 30 days of the anniversary of the company’s formation, then a derestriction process is triggered. Filing the return costs a few rand, but the consequences of ignoring it can be crippling: Contracts lapse, assets automatically vest to the state, and directors or individuals trading on behalf of the deregistered entity may face personal liability for reckless trading.

Another aspect is ensuring that the Shareholders Agreement and Memorandum of Incorporation are updated to cater for changes in the organisation’s complexity, or operations, or are simply kept up to date with the latest laws and best practice. Many companies that I have worked with had very rudimentary documents – if anything more than the legal minimum – when we as Sirdar first started working with them. Shareholders’ succession had not been thought through, there was no workable process for valuing, buying or selling shares, and the appointment or removal of directors was unclear, contradictory or likely to cause conflict.

All of these issues can and should be identified by the strategic company secretary and developed to be forward-thinking documents that link to the strategy, culture and values of the organisation; that help rather than hinder its growth and development; that make transitions easy because the process is clear and well documented.

Company secretaries should therefore have similar traits to those that I have identified for directors in other articles. They must be able to think strategically (as mentioned above), listen deeply to what is being said and not said, have high EQ so that they can think clearly and remain calm when a meeting gets heated, and above all else be confident in their knowledge and experience so that they can command respect.

When they speak, the rest of the board must pause and listen.

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