PwC: Company secretaries now centre stage
Innovation Profile Role pivotal as guardian of corporate reputation when it comes to governance and compliance
Carmel O’Connor, PwC partner, with Ruairí Cosgrove, entity governance and compliance director with PwC
The popular image of the company secretary may be one of a Dickensian figure updating dust-covered registers by hand. They were viewed as people who worked in the background, recording the actual business transacted at meetings. The reality today is much different.
These days company secretaries hold pivotal positions in their organisations and frequently act as guardians of corporate reputations when it comes to governance and compliance.
“There has been a huge increase in both domestic and international regulation in recent years and this has created additional governance and compliance requirements for companies,” says Carmel O’Connor, PwC partner with responsibility for entity, governance and compliance. “Companies are turning to firms such as ourselves for advice and support as they attempt to deal with this.”
Ruairí Cosgrove, entity governance and compliance director with PwC, says the increased weight of regulation is being most keenly felt in the financial services area.
“With the introduction by the Central Bank of the corporate governance code, the onus is on financial services entities such as credit institutions and insurance companies to provide the regulator with evidence that they are compliant.
“Company secretaries need to help businesses to identify and manage the relevant risks. It is important to have strong governance frameworks in place which are supported by robust procedures in order that costly financial and reputational damage can be avoided.”
According to Cosgrove, these frameworks need to be grounded in what might appear to be the simple task of accurate minute-taking.
“For larger organisations, the accurate recording of decisions and resolutions made at board level and committee and sub-committee levels is a huge challenge”, he says, “and you tend to get two extremes when it comes to minute-taking. In the first case, you get a record of every word spoken, almost like a court stenographer’s note, and then on the other, you might get one sentence on a very complex and vitally important decision.
“Effective minutes should be clear and objective, providing the reader with an accurate report of the discussions at the meeting, the decisions taken or any actions arising from those discussions. As transparency has become key for directors and committee and sub-committee members, the role of the company secretary in this area has expanded significantly.”
This responsibility for recording decisions places the company secretary in a very central role when it comes to governance. “The company secretary is frequently the only person in an organisation who will attend all of the various board and committee meetings and, consequently, they will be the only ones who can tie everything together and identify any gaps,” Cosgrove adds.
“For example, if information from the main board should have been communicated to the remuneration committee, they will see if it hasn’t and be able to address the issue. Similarly, they will be able to ensure that the board takes note of issues raised by its committees.”
This also places them in a pivotal position when it comes to ensuring compliance in various jurisdictions.
“The company secretary is now being seen as the director of governance and compliance in many larger firms,” O’Connor adds. “If a major US multinational misses a filing here in Ireland or some other European country by just a few days and gets a slap on the wrist from the local authorities, this can be regarded by them as a major reputational issue. This again underlines the importance of the company secretary who will be the one who should know when all of the different entities within the group structure have to file and will be able to ensure that the processes are in place to have it done on time.”