In Nigeria today, companies are being formed almost every day and in order to do so, the provisions of the law must be followed. It is common knowledge that a company is not a human being but once it is registered, it becomes an artificial being by law.
As a result of this, human beings are physically needed to run the company smoothly and in line with the provisions of the law. A company secretary is one of the human beings needed to run a company, whether it is a private company or a public company. The law through the Corporate Affairs Commission makes it compulsory for all companies to have a company secretary.
Who is a Company Secretary?
A few years ago, Marty, a secondary school graduate and an employee of Follow Me Plc, a Public Company, had a bitter argument with her colleague. Marty had been the office secretary in the company for five years and she automatically assumed that she was ripe enough to be promoted to the position of a company secretary, based on her years of experience as the office secretary.
It took the intervention of one of the directors to settle the argument and explain to Marty, the difference between an office clerk and a company secretary and the qualifications she needed to have for her to be a company secretary in any public company.
It is very important to note that a company secretary is not a secretary in the usual sense. The duties and roles of a company secretary is more than just a clerk or an office secretary. The role of a company secretary is totally different from that of an office secretary or a clerk. A company secretary is a senior officer of the company who ensures that the company obeys the rules and regulations and the provisions of the law. He also educates the directors and the company on their legal responsibilities.
In the past, company secretaries were regarded as just officers or servants of the company. But today, things have changed and the position of a company secretary is now considered to be a senior and executive position, both in private and public companies. Company secretaries are principal officers of the company and they relate with the company, the directors and the shareholders.
How is a Company Secretary Appointed?
In choosing a company secretary, certain things have to be put into consideration. Firstly, it has to be considered whether it is a private company or not. This is because the requirements for private companies are different from those of a public company.
For private companies, it is not compulsory for the company secretary to have professional qualifications or any previous experience. Yet, it is expected that a qualified and educated person is chosen because the position of a company secretary is very sensitive.
For public companies however, the requirements are quite different. This is because the law states that there are certain qualifications that must be met before a public company can appoint a company secretary. The company secretary of a public company must be properly qualified and must fall under one or more of the following:
- He must be a member of the Institute of Chartered Secretaries and Administrators.
- He must be a legal practitioner within the meaning of the Legal Practitioners Act. This means that he must be a lawyer as defined by law.
- He must be a member of the Institute of Chartered Accountants of Nigeria.
- He must be any person who has being a secretary in a public company for at least three years before applying for the position of a company secretary in a public company.
- Any company that has members who have any of the qualifications listed in (1) to (4) above can be appointed as the company secretary of a public company.
In the case of Marty, she was not qualified for the position of the company secretary because the company is a public company and she did not have any of the listed qualifications. Even if it was a private company, it would not have been advisable to appoint Marty as the company secretary. This is because of the complex duties and sensitive roles attached to the position of a company secretary. Such a person is expected to be well educated and knowledgeable.
When registering a new company, the company secretary is automatically chosen once his name is entered in the registration forms. Such forms should be filled and filed at the Corporate Affairs Commission.
Roles of a Company Secretary
The roles of a company secretary are wide and cover a lot of areas. Usually, the name of the company secretary is spelt out on legal documents of the company and he has the duty to make sure that the company and its directors perform their duties adequately. He should also make sure that the laws guiding the company are obeyed. It is also the responsibility of the company secretary to relate with shareholders and stakeholders of the company effectively.
It should be noted that the company secretary is acting on behalf of the company and he must make sure that his duties are properly carried out within the time provided by the law. He has the authority to sign documents on behalf of the company. If he acts carelessly, this could affect him and the company. It is therefore advisable to choose the right person with the right qualification as the company secretary.
A company secretary has the duty to ensure that the company obeys the rules and laws guiding companies in Nigeria. He acts as a point of communication between the board of directors and the shareholders, and he reports the activities in the company and any changes in the law within the stated time.
The company secretary is expected to know the laws guiding the nature of his company. For example, the company secretary of a bank is expected to be familiar with the laws guiding banks and the provisions of the Central Bank of Nigeria. Also, a company secretary for an insurance company should be familiar with the laws guiding insurance companies.
This means the roles of company secretaries are usually different, depending on the nature and business of each company. However, the main purpose of the company secretary is to make sure the company obeys the laws and regulations guiding it.
As a result of the importance of this position, a company secretary has different duties and responsibilities towards the company. Some of these duties include:
- Attending meetings of the company and taking minutes of meetings.
- Providing necessary information to the directors and the company.
- Making sure that the company obeys the laws guiding it.
- Keeping the registers and records of the company.
- Keeping the company seal.
- Giving notices and making announcements where necessary.
- Organizing and preparing programs and agendas for meetings.
- Giving advice where necessary.
- Checking for any change in the laws and taking necessary steps.
- Communicating with outsiders, such as auditors.
The company secretary also has a responsibility to the board of directors and shareholders. He is expected to provide support to the chairman and other directors and make necessary documents available so that they can carry out their jobs effectively. He should also provide professional advice and adequate information to the board. He is the link between the board of directors and the shareholders.
The company secretary is responsible for the smooth running of the company, especially in obeying the laws guiding the company. He is expected to be independent and to act in a confidential manner and in the best interest of the company. In performing his roles and duties, he should be given sufficient support from the company.
A company secretary is expected to be independent, that is, he should perform his duties without fear or loyalty to anyone. His loyalty should be to the company. He should be skillful, educated, have relevant experience, have good ethics and integrity so that he can always act in the best interest of the company.