Demystifying the Company Secretary Duties in Australia A Comprehensive Guide

What is Company Secretary in Australia

A company secretary is a very crucial role in a business. This significance has risen dramatically in the last two decades, particularly due to the collapse of some high profile companies in 1990s and 2000s (let us remember the collapse of HIH Insurance and the Bell Group). These failures gave rise to a rather significant attention being turned to corporate governance, including the roles of directors, boards, executives and, of course, company secretaries.

With more and more work being dumped on the boards of companies, the company secretary is usually the main governance specialist. They are trusted to provide good governance advice in a timely and quality manner. The role has turned into a very proactive one compared to the past.

Company secretaries are also now under strict legal duties under the Corporations Act 2001, the primary company law in Australia, as well as Australian Stock Exchange (ASX) listing rules. Further, we will go through what company secretary does, their roles, responsibilities, and qualifications.

Company Secretary Role in Australia

The role of the company secretary in governance is crucial and as such, the company secretary has to be concerned with the way the company operates. They are in effect ‘chief governance advisor’ of the company and help the board of directors to make sure that the company is compliant with the corporate legislation.

Some of these are lodging ASIC financial reports, having a registered office and reporting to ASIC changes regarding the company’s members, share issuing, share structure, and company office address.

The ASX’s Corporate Governance Council’s Corporate Governance Principles and Recommendations has acknowledged the significant role of a company secretary. The commentary to Recommendation 2.5 says:The commentary to Recommendation 2.5 says:

The company secretary is a vital instrument in ensuring that the board runs effectively in that he/she oversees compliance with board policy and procedures, and ensures the timely preparation and distribution of board agenda and briefing material. All directors should have an access to the company secretary. The appointment and dismissal of the company secretary should be an issue for the board decision as a whole. All matters of governance should be reported to the board through the chair by the company secretary.

Under the Corporations Act, company secretaries are regarded as “officers”. This implies that they are vested with legal obligations to act in care and diligence, in good faith and for a proper purpose. They also have the responsibility of not inappropriately using their position or of benefiting themselves or someone else. Company secretaries shall not act to prejudice the company and shall not inappropriately use information which they acquire by reason of their position.

Company Secretary Task

Although company secretaries have many legal responsibilities, they also have many roles to play in their role.This includes:

  • Keeping minutes of the discussions that takes place at meetings of the company.
  • Confirming that meetings are named correctly.
  • Make sure that policy and procedure are adhered to by the board properly.
  • Compile reports and forward to the board.
  • Keep the business financial reports in order.
  • Counsel the board on issues of governance.
  • Assistance with the process of inducting new directors.
  • Promote board professional development.
  • Keep the company’s compliance policies and procedures.

Their function can be very wide and will differ according to the composition of the board and the size of the company. In big companies, secretaries tend to have wider roles than the ones enumerated above. When a company has many shareholders or a board of directors, they usually demand the secretary to be very busy.

Other tasks that a company secretary may be expected to do include:Other tasks that a company secretary may be expected to do include:

  • Advocating for the company’s compliance framework to protect the integrity of the company.
  • Board member performance reviews.
  • Directors induction management.
  • Maintain the director manual
  • Participation in risk management and corporate compliance issues.
  • Facilitate the board to make informed decisions by giving them the information that they require to use good business judgment.

Appointment And Dismissal of Company Secretary in Australia

The Corporations Act contains strict regulations regarding the appointment, departure, and removal of a secretary.

Appointment of Company Secretary in Australia

Listed companies in Australia must have at least one company secretary. At least one of them should usually live in Australia (that is, they should live here in Australia most of the time). Private companies do not require a company secretary, however, if a company chooses to have one, they should be usually resident in Australia. They also have to be a living person and at least 18 years of age.

An appointment of a secretary by a company director is a determination of their role conditions, such as setting their salary, among others. The company should inform ASIC within 28 days of the appointment of a company secretary. Those secretaries need a signed consent from them before the appointment becomes official. This consent will then have to be retained by the company – and failure to retain this consent is an offence under the Corporations Act.

After the secretary is employed, he or she usually will report to the company’s chief executive officer (CEO) or chief financial officer (CFO). In bigger companies, they will also report to the chair of the board.

Resignation of Company Secretary in Australia

Secretaries can leave the company by written notice. They will also require to inform ASIC regarding the resignation.

If the company secretary does not inform ASIC of the resignation, then the company has to notify ASIC about the resignation of the secretary.

Removal of Company Secretary in Australia

Removal of a company secretary is normally by other company directors in the light of a company’s constitution. But if there is no procedure, the directors can pass a resolution to remove the secretary and notify ASIC within 28 days of the removal.

Qualifications of Company Secretary in Australia

A company secretary does not require any specific qualifications or experience to play their part both to the company and to the board.

Nevertheless, legal qualifications are useful. It is because companies and their directors depend on the company secretary for advice in respect of their compliance with corporate law. This covers everything from ASIC notifications and convening meetings and to proper company conduct.

Company Secretary vs General Counsel in Australia

While the designations of the company secretary and general counsel can be separate entities, the key functions that they perform may have a lot of common influence among themselves.

Company general counsel is the principal legal officer of a company. They are mainly tasked with giving legal counsel to corporate executives – this can be on commercial and corporate law to employment and intellectual property law.

In a modern corporation, though, they are more of a partner in business. They add value to a company through top-level strategic planning, business process management, financial functions and corporate project management.

The company secretary may not necessarily be a lawyer. Their tasks are rather of the nature of the bullet points we have given in this article. They are statutory officers with obligations under the Corporations Act, while general counsels are not.

Each general counsel and company secretary role is unique. Most organizations have different expectations for each role and again this will depend on the size and structure of the company.

There is a controversy in the corporate world as to whether or not a company secretary and a general counsel should be combined in one role. Finally, this is an issue that every company has to settle. It could be that these positions are too big to be filled by one person. It also leads to role ambiguity.

The Significance of ASX Listing Rules for Company Secretary

ASX public companies have vigorous financial compliance obligations. Boards and executives expect company secretaries to be walking rule books, to guarantee absolute compliance. The consequences of not following some of the ASX listing rules can be penalties and sometimes even imprisonment, so it’s a high-stake game.

Fastlane Group ensures that companies and boards comply with the rigorous financial reporting requirements of the ASX. Our company helps directors, secretaries, and chief financial officers to gain transparency on their solvency and arrive at an exact picture of their financial state. Contact our team of experts today and we will be happy to help you.

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