The company secretary is one of the most senior figures in any corporate organisation, and one which all UK listed plcs are obliged to appoint. Their main responsibilities include working with the board on high-level issues and taking responsibility for ensuring the company complies with the law.
To do the role well, you'll need to be super-organised and comfortable taking the lead, as Nicola Brentnall, company secretary of The Prince's Trust, explains: "The role of a company secretary is to make sure that the right decisions are taken by the right people, with the right information, at the right time. The chief executive is focused on running the company and making sure they have the team they need in place to do so. It's the company secretary who creates the space for the board to ask what it's doing, what its processes are, who they are, where they are going, what their agenda is, and why? And afterwards the company secretary is there to remind them what they said they were going to do, and what they've done. The company secretary makes sure that the board is focused on keeping the company going in the right direction."
Lorraine Young, who runs her own freelance company secretary business, describes how the role requires exceptional people skills . Working as a company secretary, you'll be dealing with the high-level dynamics of the boardroom: "The company secretary is there for all of the directors to help form relationships between them. There is a lot that the company secretary can do to build trust."
Heart and head
But what does a company secretary actually do day to day? There's no easy answer. As Nicola says, "every company secretary, and every organisation does different things. Some of them are responsible for HR and finance, some of them are not, some of them are involved in legal work, some of them aren't." Lorraine indicates how the duties of someone within a company secretary team might progress as they become more experienced: "When people are training, they might work on compliance with the Companies Act, keeping the company's records, keeping track of stock exchange rules, producing the annual report, organising the AGM. And as you become more senior, you'll be in board meetings, providing advice and making the whole process work better."
The factors that draw people to the role are as diverse as the tasks involved. For many it's the breadth and depth of the work; as Nicola puts it, "you're working on so many different sorts of projects at the very heart of the organisation." She also mentions the unique insights into company strategy that are appealing for many in the job: "The company secretary goes to all of the board meetings and all of the committee meetings, so they are probably the best informed of all of the senior management team about what's happening, because they see it all." David Parkes, company secretary of BAE Systems agrees: "There is no better way to see a company in action than from the company secretary seat."
But the role is far from that of passive observer; a further attraction of working as a company secretary is that the job, as Lorraine tells The Gateway , is "Very practical and hands-on." She explains how a company secretary can play a crucial role at important times for the company: "If you're working for a plc as a company secretary, it's key to understand the Listing Rules and to know when something needs to be declared to the market. The penalties for getting it wrong are quite severe. It's down to the company secretary to be aware of the rules in enough detail to say: "Hold on a minute, I think we need to announce something here." You may then need to go and talk to the investment banker or broker for some detailed advice, but you are in charge of the process."
She gives another example: "You as company secretary and the board might be looking at a new share plan. The investors might produce guidelines on what they will support and what they won't, which you will review as an expert for the board, and then provide guidance that could prevent the directors from wasting a lot of time considering a plan which you can almost guarantee will be opposed."
The role of company secretary has become more prominent in recent years as corporate governance in a number of different sectors has come under scrutiny. The early years of the last decade saw accounting scandals such as the bankruptcies of Enron and WorldCom, and the economic crisis exposed flawed decision making practices in the financial services industry. The BP oil spill off the US Gulf Coast earlier this year was the latest in a series of industrial accidents revealing how poor corporate governance can lead to inadequate adherence to safety measures.
In recognition of the role that company secretaries play in promoting good practice, the Institute of Chartered Secretaries and Administrators (ICSA), the professional body for company secretaries, was asked earlier this year by the Financial Reporting Council to develop guidance to complement the new edition of the UK Corporate Governance Code issued in May. Draft guidance was launched for public consultation in July, which recommended the promotion of good decision making processes, and ICSA will submit final recommendations by the end of the year.
Down to earth
The Gateway wonders what good corporate governance looks like on the ground - and what role the company secretary can play? Nicola sees the provision of good information to the board as crucial: "Board members are generally all bright, savvy people who can distill information and get to the hub of things very quickly. But they need to have the information presented in the right way in order for them to do that. Because if they get mountains of paper, and haven't got that much time to read it all, they're never going to see the warning light that might be flashing somewhere in the middle." What can a company secretary do to help? "The company secretary can make sure that the information is presented well, and on time, and that, wherever it comes from in the organisation, it all comes together properly and clearly. And they also make sure that if something was promised to the board by a particular committee, it is provided to them at the right meeting so that these things don't slip through the cracks."
Good use of non-executive directors is a linked dimension of good corporate governance mentioned by our interviewees. Lorraine reminds The Gateway of how failures in this area were one of the causes of the 2007-09 financial meltdown: "Sometimes what the directors of financial institutions were being asked to consider was just so complicated that a lot of the non-execs didn't understand what was being suggested, and then it became difficult for them to question anything." In such situations, a company secretary can act as a filter, reviewing the papers and asking whether the right kind of information has been provided to these directors in particular, who, by definition, are not involved with the company on a daily basis.
Open to debate
As Nicola points out, the company secretary can also help non-executive directors by encouraging them to participate as much as possible, which helps to ensure good decisions are made for the company. This part of the job often mean encouraging robust discussion. David explains how, although it might seem paradoxical, too much consensus can mean things are going wrong in the boardroom: "You might have an overly powerful chief executive or chairman which means the board isn't being allowed to debate matters properly, or issues aren't even getting to this forum. What happened with some of the banks during the financial crisis is a good example - some of them adopted high risk strategies, which should have been challenged more strongly. So a good company secretary will help all members of the board use their skills and, where necessary, question policies that the company is pursuing."
Lorraine also explains how a company secretary can also be helpful by playing a role in board evaluation, a relatively new phenomenon which, unsurprisingly, is not always welcome to directors: "It can be a challenge. Some directors see it as a bit of a waste of time as they think that they are there to be making money, and some feel threatened by it." But she notes that such evaluations and other good practices that company secretaries can encourage are becoming ever more important to those in business: "I think people are now looking at corporate governance measures and seeing the rationale for having them in place. If they want to raise finance, investors will only be putting money into companies that are well run."
People from many different professional backgrounds become company secretaries. Here is how our interviewees got to where they are today.
*Nicola Brentnall *Company Secretary, The Princes' Trust
"I came to the Prince's Trust from a training and enterprise council where I had been the assistant to the chief executive there. I came here to do a similar role for the then chief executive of the Prince's Trust. I was keen to find a qualification that matched the skills that I had in board administration and strategy development and so the Prince's Trust paid for me to study for the ICSA Chartered Secretary qualification. Then the incumbent company secretary left, who had also been the finance director, and we decided that it would make more sense to have someone focused on the company secretary role full time. And that's when I was promoted into the role."
*David Parkes *Company Secretary, BAE Systems plc
"I joined BAE Systems as a graduate and trained with ICSA whilst working for the company. I became a qualified Chartered Secretary about three years after joining what was then British Aerospace, which is about the quickest time you can do it - it is quite an in-depth set of exams. I was made company secretary of the company as a whole just over ten years ago. In my current team, one member joined us from BT's company secretary department who had trained while working for BT. Another one came in with a similar background from HSBC."
*Lorraine Young *Lorraine Young Company Secretarial Services
"I graduated with a chemistry degree, but decided that I didn't want to work in a laboratory forever. But it wasn't until I was actually working that I came across the role of the company secretary and I thought it was something that would suit my skills and interests. So I found a position with a small company and worked with them for several years while I got the professional qualifications. I got some exemptions, but I didn't have the right degree to get as many exemptions as you would do with a law or business degree. And I found I really enjoyed it! Once I qualified I wanted to be in a larger organisation, and so I went on to work for several firms in the City. But when I had children, I wanted to work differently and so decided to go freelance. I've done it now for several years and it has worked out incredibly well. It doesn't pay as well as working in the City, but there are other benefits. It's very flexible. I get the benefit of working from home sometimes, and then other days I'm out seeing clients."
The Institute of Chartered Secretaries and Administrators (ICSA)
ICSA is the professional qualifying and membership body for Chartered Secretaries and Administrators. It trains those who wish to qualify into the profession, and also promotes and supports good corporate governance and compliance.
It also provides educational and networking opportunities for its members. Lorraine comments: "ICSA provides briefings if relevant law or an aspect of practice is changing. They will often arrange breakfast sessions, which are ideal - people can pop along for a couple of hours and get a heads-up on the key points. You can ask your questions, then have a coffee and network and be back in the office by ten o'clock. You get a lot of support in this career, from both ICSA and other people in the profession."