Company Secretary

The Company Secretary: A Guide for South African Governance Professionals

The title "Company Secretary" can be misleading. Far from being a clerical or administrative assistant, the modern Company Secretary is a senior, strategic-level officer of the company, serving as the primary custodian of its corporate governance framework. This role has undergone a profound transformation, evolving from a traditional record-keeper to a pivotal advisor to the Board of Directors, ensuring the organisation operates with integrity, transparency, and in full compliance with the law.

In the sophisticated South African governance landscape, the Company Secretary is the vital link between the board, management, shareholders, and other stakeholders. They are the board's chief advisor on all governance matters, the conscience of the company, and the architect of the processes that enable the board to function effectively and fulfill its legal obligations.

This guide provides a comprehensive exploration of the role of the Company Secretary in South Africa, delving into its evolution, the legal mandate under the Companies Act 71 of 2008, the strategic expectations of the King IV Report, and the practical duties that define this critical position.

The Evolving Role: From Administrator to Strategic Advisor

The journey of the Company Secretary reflects the evolution of corporate governance itself.

The Traditional View

Historically, the role was perceived as primarily administrative. The Company Secretary was responsible for the logistical aspects of board meetings, taking the Meeting Minutes, and ensuring the company's statutory books were in order. While these tasks remain important, they represent only a fraction of the modern role.

The Modern Strategic Partner

Today, the Company Secretary is a proactive governance professional. The complexity of modern business—characterised by stringent regulation, heightened stakeholder scrutiny, and a fast-paced digital environment—demands a Company Secretary who is a strategic thinker. They are the trusted counsel to the Chairman of the Board, providing impartial advice and supporting the board in navigating complex legal and ethical challenges. They champion good governance not as a compliance burden, but as a driver of sustainable value creation.

The Legal Mandate and Appointment in South Africa

The importance of the Company Secretary is formally recognised and mandated by South African law and governance codes.

The Companies Act, 71 of 2008

The Act solidifies the role and responsibilities of the Company Secretary in statute.

  • Mandatory Appointment (Section 86): The Act makes it mandatory for all public companies and state-owned companies to appoint a Company Secretary. While not compulsory for private companies, the King IV Report strongly advocates for all organisations to have access to these professional services, whether through an in-house appointee or an outsourced provider.

  • Board's Responsibility (Section 87): The Board of Directors is explicitly responsible for appointing a person who they believe has the requisite knowledge and experience to fulfill the role. This underscores the seniority of the position and the board's reliance on their expertise.

The King IV Report Perspective

King IV further elevates the strategic importance of the Company Secretary.

  • Principle 10 recommends that the board should ensure it has access to professional and independent guidance on corporate governance. The Company Secretary is the primary source of this guidance.

  • Independence and Access: King IV recommends that the Company Secretary should have an arm's-length relationship with the board and its directors. They should not be a director themselves and should have a direct channel of communication to the Chairman. This structure ensures they can provide impartial advice without fear or favour. The "arm's-length" principle means that, while the Company Secretary may report to the CEO for administrative purposes, they are accountable to the board.

The Duties of the Company Secretary: A Deep Dive into Section 88

Section 88 of the Companies Act provides a clear, statutory list of the Company Secretary's duties. This is the legal foundation of the role.

Guiding the Board on Governance (Section 88(2)(a))

This is the most significant strategic duty. The Company Secretary is required to provide the directors of the company, collectively and individually, with guidance as to their duties, responsibilities, and powers. This involves advising on:

  • The scope of their Fiduciary Duties (care, skill, diligence, and loyalty).

  • The proper procedures for managing conflicts of interest under Section 75.

  • The legal implications of strategic decisions and proposed actions.

  • The principles of good governance as outlined in the King IV Report.

Ensuring Compliance with the Law (Section 88(2)(b) & (c))

The Company Secretary is a central compliance officer. They are legally required to:

  • Make the directors aware of any law relevant to or affecting the company.

  • Report to the board any failure on the part of the company or a director to comply with the Memorandum of Incorporation (MOI) or the Act.

Administrative and Procedural Duties

These duties form the bedrock of board effectiveness and statutory compliance.

  • Ensuring Meeting Minutes are Kept (Section 88(2)(d)): The Company Secretary is responsible for the entire lifecycle of minutes for the board, Board Committees, and shareholder meetings. This includes ensuring their proper recording, circulation, approval, signing, and archiving.

  • Statutory Filings (Section 88(2)(e)): They must ensure that all annual returns and other statutory notices (e.g., changes in directors) are lodged timeously and accurately with the Companies and Intellectual Property Commission (CIPC).

  • Maintaining Corporate Records (Section 88(2)(f)): They are responsible for ensuring that the company's statutory registers (such as the securities register and register of directors) are properly maintained.

The Company Secretary in Practice: Beyond the Statute

Beyond the legally defined duties, the practical role of an effective Company Secretary is even broader.

  • The Architect of Board Meetings: They work in close partnership with the Chairman to craft a forward-looking, strategic Agenda. They manage the entire process of compiling and distributing the Board Pack, ensuring the directors receive high-quality information in a timely manner.

  • The Facilitator of Communication: They act as a central point of contact, facilitating communication between executive management and non-executive directors, and between the company and its shareholders. They also play a key role in the induction of new directors and the coordination of ongoing professional development for the board.

  • The Custodian of the Governance Framework: They are responsible for developing, maintaining, and reviewing the company's governance architecture. This includes committee charters, the board's code of conduct, and a host of other policies that translate the principles of good governance into practice.

The Modern Company Secretary's Toolkit: The Role of Technology

The breadth and complexity of the Company Secretary's duties make it virtually impossible to manage them effectively using outdated, manual processes. Modern board portal software, such as BoardCloud, has become an indispensable tool for the governance professional.

  • Efficiency and Strategic Focus: BoardCloud automates the laborious tasks of Board Pack creation and distribution, freeing up the Company Secretary to focus on higher-value strategic and advisory work.

  • Seamless Governance and Compliance: The platform provides a secure, centralised environment for managing agendas, taking Meeting Minutes, tracking resolutions, and storing all governance documents. This creates a "golden thread" of information and a clear audit trail, directly supporting the duties outlined in Section 88.

  • Enhanced Board Effectiveness: By providing directors with secure, instant access to all relevant information on any device, a board portal empowers them to prepare more effectively and fulfill their Fiduciary Duties with greater confidence.

Frequently Asked Questions (FAQ)

Does my private company need a Company Secretary in South Africa?

Under the Companies Act, it is not mandatory for a private company to appoint a Company Secretary. However, the King IV Report strongly recommends that all companies, regardless of size, ensure they have access to professional governance advice. Many private companies choose to appoint a Company Secretary or outsource the function as a matter of good practice.

Can a director also be the Company Secretary?

While the Companies Act does not explicitly prohibit this, the King IV Report strongly recommends against it. The roles are distinct and having a director serve as the Company Secretary can create a conflict of interest and undermine the independence required to provide impartial advice to the board.

Who does the Company Secretary report to?

This is a critical governance question. To ensure independence, the Company Secretary should have a dual-reporting line. For their day-to-day administrative functions, they may report to the CEO. However, for their governance duties, they are accountable to the board, with a direct line of communication to the Chairman of the Board.

What qualifications does a Company Secretary need?

The board must appoint someone with the "requisite knowledge of, or experience in, relevant laws." While there is no single prescribed qualification, this typically means the person holds a professional designation in law, accounting, or corporate governance, such as that offered by the Chartered Governance Institute of Southern Africa (CGISA).

Conclusion: The Pillar of Governance

The Company Secretary has cemented its position as a central pillar of the modern South an African governance framework. No longer confined to the administrative sidelines, they are strategic partners to the board, responsible for upholding the highest standards of integrity, transparency, and compliance. The demanding duties set out in the Companies Act and the strategic expectations of the King IV Report confirm that an effective, knowledgeable, and empowered Company Secretary is indispensable for any organisation committed to governance excellence.