Corporate Secretary

A key responsibility for the Corporate Secretary is to ensure that the Company's Management Board has the proper advice and resources for discharging its fiduciary duty under state law, and to ensure that the records of the Board's actions reflect that the Board has done so. The Corporate Secretary function ranges from making sure new directors have training in the applicable state law duties, to advising the board when there are amendments to the state law or developments in case law, to partnering with business presenters to ensure the proper steps are followed for major matters (such as having the investment bankers in the meeting to review the diligence, and the fairness opinion, before a major acquisition or disposition).

Providing advice on corporate governance issues is an increasingly important role for corporate secretaries. Many shareholders, particularly institutional investors, view sound corporate governance as essential to board and company performance. They are quite vocal in encouraging boards to perform frequent corporate governance reviews and to issue written statements of corporate governance principles. The Corporate Secretary is usually the executive to assist directors in these efforts, providing information on the practices of other companies, and helping the board to tailor corporate governance principles and practices to fit the board's needs and expectations of investors. In some companies, the role of the Secretary as corporate governance adviser has been formalized, with a title such as Chief Governance Officer added to their existing title.

For most corporate secretaries, these skills are evidenced in the following areas:

1. Board and Committee Meetings
2. Annual Meeting of Shareholders
3. Corporate Records
4. Stock Transfer
5. Securities Markets
6. Director, Officer, and Shareholder Concerns
7. Compliance

Board and Committee Meetings - Being responsible for the smooth operation of corporate meetings requires planning and attention to detail, ranging from assuring that agendas are logically ordered and not overcrowded for the time available, to knowing how to find directors and committee members on short notice when special meetings are needed. To do it well, the Corporate Secretary needs a good working knowledge of the corporate, legal and regulatory matters which may come up at a meeting, and of the business of the corporation and its operations.

Annual Meeting of Shareholders - Preparation and distribution of the proxy statement and notice of meeting (as well as preparation of the directors' and officers' questionnaires needed to prepare the proxy statement) usually are some of the major functions. The Secretary may also be involved in preparing and distributing the Annual Report. Production of these documents requires a knowledge of federal and state law, and of the rules of the stock exchange(s) on which the company's stock is listed. It also requires a high level of skill in coordinating input from lawyers, personnel and finance groups, as well as directors and senior officers; the knack of dealing with transfer agents, printers, and mailing houses; and the ability to remain calm despite inevitable last-minute changes that threaten to ruin "do-or-die" production schedules, not to mention budgets.

Corporate Records - The Corporate Secretary must assure not only that records are filed and protected and, where applicable, indexed and kept up-to-date, but also that they are accessible. A considerable amount of a Corporate Secretary's time is spent organizing, retrieving, explaining and certifying corporate documents. In addition, the Corporate Secretary is often required to certify officer signatures, affix the corporate seal to various corporate documents, and attest to their legitimacy. The Corporate Secretary must also assure that important corporate records are retained in accordance with applicable law and sound business practice.

Stock Transfer - Maintaining shareholder records, and providing for the transfer or replacement of stock certificates, is ultimately the responsibility of the Corporate Secretary. In most major corporations, however, this function is handled by a separate unit or by an outside transfer agent, with the Corporate Secretary acting as the corporate liaison.

Compliance - The Corporate Secretary is often the person responsible for pre-clearing purchases and sales of the corporation's securities by directors and officers. The Corporate Secretary may also play a role in preparing corporate communications on matters of significance to the corporation, including essential disclosures.

Updated On: 09.10.04