Do You Need a Governance Professional?

 

An effective corporate secretary or other governance professional is a great resource for any board of directors. They provide support and guidance to the board in carrying out its fiduciary duties, making sure that it operates within legal and ethical boundaries.

Among their many duties, they’re responsible for maintaining accurate records of board meetings, managing board communications, and ensuring compliance with governance policies and regulations. They help ensure the board has the information and resources it needs.

In short, a competent governance professional can be an integral part of the board's infrastructure, helping it to operate effectively and efficiently.

In today’s edition of The Savvy Director, let’s explore the role of the modern governance professional.

What’s in a Name?

The terms corporate secretary and governance professional are not completely interchangeable. While some corporate secretaries may be considered governance professionals, not all governance professionals are corporate secretaries.

A corporate secretary — or company secretary or board secretary — is a specific role, whereas governance professional is a broader term that encompasses a range of roles and responsibilities related to corporate governance.

Governance professionals hold various titles from: Chief Governance Officer, Corporate Secretary, Corporate Counsel, Executive Director, Head of Compliance, Risk, Legal. They are responsible for: implementing governance policies and procedures, monitoring compliance, supporting the board and its committee meetings and processes, fostering a culture of transparency and accountability and managing the space between the board and management. – Governance Professionals of Canada (GPC)

 For simplicity’s sake, in this blog we’ll use the terms more or less interchangeably.

What are the Core Responsibilities?

Duties and responsibilities vary somewhat from one organization to another, depending on the board’s needs. Still, there are certain responsibilities that almost every organization requires from a governance professional or corporate secretary.

Organizing meetings. Effective corporate secretaries lay the groundwork for productive meetings that run smoothly and efficiently. They’re responsible for planning and executing board meetings, committee meetings, annual meetings, board retreats, etc. They collaborate with the board and management to identify and prioritize discussion items, and they help the board chair and committee chairs to prepare agendas. They assist management with producing documents and reports that meet the board’s needs, and distribute them ahead of time.

Planning the calendar. Working with the board chair, governance chair, and/or CEO, they develop and maintain the annual board calendar or work plan to ensure that all the necessary governance and regulatory tasks are taken care of.

Preparing minutes. They play a key role in writing meeting minutes and getting them approved before storing them as part of the corporate record.

Keeping records. They maintain all the organization’s legal documents, including meeting minutes, resolutions, contracts, and regulatory filings, ensuring they’re accurate, up-to-date, and accessible to directors, external auditors, and regulatory bodies. Where relevant, they manage corporate filings and disclosures.

Managing director onboarding and training. They often manage the onboarding process for new directors. And when directors need to know more about the industry, the regulatory landscape, board governance, or other areas, the corporate secretary arranges for access to ongoing education, training sessions, and workshops.

Administering board evaluations and board development. They’re usually the lead person in administering board evaluations or board governance audits. If there are gaps in the board’s knowledge or expertise, they’re the first to identify and mitigate them. When a board development plan is created in the wake of an evaluation or audit, they monitor progress against the plan.

Providing board support and administration. They give additional support such as coordinating board activities, facilitating communication between directors and management, tracking board members’ terms, and providing whatever’s needed to enable the board to focus on strategic decision-making.

Advising on governance matters. They provide strategic advice on issues related to corporate governance, keep the board informed about governance trends and best practices, and ensure the company operates ethically and responsibly. As governance experts, they may advise on matters like board and committee composition, board appointments, and the board's competency needs. If they don’t have the answer to a governance question, it’s their job to find it from external advisors or general counsel.

Monitoring the governance framework. They’re the leading authority in the company about designing and maintaining a sustainable governance framework in the face of increasing regulatory scrutiny and stakeholder expectations. They develop governance policies and processes that align with the organization’s goals and monitor their effectiveness over time.

Overseeing regulatory compliance. They play a critical part in protecting the organization from legal and reputational risks by safeguarding ethics and corporate governance. They administer compliance with the code of conduct and conflict of interest policies. In some organizations, they may also be responsible for ensuring compliance with all applicable laws, regulations, and industry standards.

What about private companies and non-profits?

The role of a corporate secretary differs somewhat depending on the type of organization they’re working for.

• In publicly traded companies: They’re often responsible for ensuring compliance with securities laws and regulations, such as filing required reports and ensuring that the company's disclosure practices meet standards. They may also play a role in managing the relationship with shareholders and overseeing the administration of shareholder meetings.
• In private companies: They may have more of an administrative role, such as maintaining corporate records, ensuring compliance with requirements related to corporate governance, supporting the board, and facilitating communication between the board and management.
• In non-profit organizations: Their role is similar to that in private companies, with a focus on maintaining accurate records, ensuring compliance with legal requirements, and supporting the board. They may also be responsible for overseeing membership lists, managing the relationship with donors, and overseeing the administration of fundraising activities.

How is the Role Changing?

The corporate secretary’s role continues to evolve to reflect modern governance requirements and respond to current trends such as changing stakeholder expectations and increased regulatory scrutiny.

Traditionally seen as the keeper of corporate records and administrative tasks, today's corporate secretary is at the forefront of governance, compliance, and strategic decision-making. — Heather Laxton, The Governance Gazette

Increased focus on transparency and disclosure: Corporate secretaries play a key role by developing policies and procedures to promote transparency and ensuring the board is properly informed. For instance, they’re often responsible for reporting on ESG (Environmental, Social, Governance) metrics.

Greater emphasis on risk management: They are increasingly involved in managing risks, collaborating with management and the board to identify, assess, and mitigate risks that could impact the organization's reputation or financial stability.

More involvement in strategic planning: Modern governance professionals work with the board and management to identify strategic objectives and initiatives, helping to ensure the strategic plan is aligned with sound governance practices.

Greater use of technology: Automation and digital tools have streamlined administrative tasks, allowing corporate secretaries to focus on more strategic activities. More and more, governance professionals are using technology to manage their workload, including software for board management, document management, and compliance tracking.

More engagement with stakeholders: Beyond the boardroom, they often engage with a wide range of stakeholders, including shareholders, investors, regulatory bodies, and the public. They ensure that the company's interactions with these groups are transparent, ethical, and compliant with regulations.

Do We Need a Corporate Secretary?

As far as the legalities go, the requirement to have a corporate secretary varies by jurisdiction and type of company, so be sure to check with your own legal counsel. In many jurisdictions, there’s no legal requirement for companies to have a corporate secretary, but regulations may require certain companies to appoint one.

As a general rule, requirements for public companies are more stringent than for private ones. While having a corporate secretary may not be legally required for your particular organization, it’s worth considering the benefits in terms of promoting transparency, accountability, and good governance.

There are several factors to consider before making the decision, including size, complexity, meeting frequency, regulatory oversight, and the need for accurate records. To help your board decide, savvy directors can ask questions like these:

• What are the benefits of having a corporate secretary?
• What would be the downside?
• What are the associated costs?
• What are the risks of not having one?
• What functions would they perform? Who takes care of these now, and how would having a corporate secretary impact their job?
• How would our board governance improve if we had a dedicated governance professional?
• Do we have enough work to keep a corporate secretary busy? If not, what other responsibilities might be assigned to the incumbent?
• How do our regulatory oversight requirements impact our need for a corporate secretary?

What to Look for in a Governance Professional

If your board decides in favor of having a corporate secretary or other governance professional, what should you look for? The qualifications vary depending on your specific requirements, especially if the job will include functions that are not, strictly speaking, governance related.

Still, there are some general qualifications that companies look for:

• Knowledge. An understanding of corporate governance principles and familiarity with best practices in the field. Knowledge of legal and regulatory requirements. Familiarity with the company's industry, structure, and operations.
• Education. A bachelor's degree in business administration, law, or a related field.
• Credentials. Professional certification such as GPC.D from the Governance Professionals of Canada or Chartered Governance Professional from the Chartered Governance Institute.
• Experience. Experience in corporate governance, legal compliance, or working with boards and executives in another capacity.
• Communication skills. Excellent oral and written communication skills to clearly convey complex information. The ability to maintain confidentiality and to extract key information from lengthy conversations.
• Organizational skills. The ability to juggle multiple responsibilities and work well under pressure. Strong time management skills to prioritize tasks, follow through on commitments, and adapt to changing priorities
• Ethics and trustworthiness. A record of avoiding conflicts of interest, acting in the best interests of the organization, and living up to high ethical standards.

Your takeaways:

• A governance professional’s role is to provide support and guidance to the board in carrying out its fiduciary duties.
• While some corporate secretaries are governance professionals, not all governance professionals are corporate secretaries.
• Today's corporate secretary is at the forefront of governance, compliance, and strategic decision-making.
• It’s worth considering the benefits of having a corporate secretary to promote transparency, accountability, and good governance.
• When thinking about whether to have a corporate secretary, consider factors such as size, complexity, meeting frequency, and regulatory oversight.

Resources:

• 10 responsibilities of the corporate secretary in the boardroom. Meghan Day. Diligent. September 2024.
• 2023 Report on Governance Professionals Responsibilities & Remuneration. Global Governance Advisors and Governance Professionals of Canada. March 2024.
• A Nonprofit Board Secretary’s Guide for Amplifying Impact. The Team at Boardable. © 2024 Boardable.
• The Governance Officer: The Evolution of the Corporate Secretary. Heather Laxton. The Governance Gazette. October 2023.
• The Evolving Role of Corporate Secretaries in 2023. Jielynne Barao. Convene. May 2023
• Corporate Secretaries and the Private Board. Private Company Director. November 2016.
• What is a Corporate Secretary, and Do I Need One? Scott Pfeiffer. LinkedIn. April 2015.

Thank you.

Scott

Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online membership with practical tools for board directors who choose a growth mindset.

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