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Once upon a time, company secretaries were merely seen as company administrators1. The profession of company secretaries has come a long way since then. Today, the role of company secretaries have expanded in the leaps and bounds to include corporate governance, corporate planning, and strategy development for the companies that engage their services.
Before we dive into the roles, duties, and responsibilities of a company secretary, let us first briefly discuss the requirements of qualifying as a company secretary.
Eligibility to become Company Secretary
The Companies act 2016 (“the Act”) makes it compulsory for companies to appoint a company secretary2. To be eligible as a company secretary, an individual must:
- Be a natural person of 18 years and above, and is a citizen or permanent resident of Malaysia3;
- Have at least a Sijil Pelajaran Malaysia (SPM) certificate or equivalent with credit in either Bahasa Malaysia or English;
- Have at least 1 – 5 years working experience in fields relating to company law or company secretarial practice, depending on the academic qualification held4;
- Must be a member of a body5 recognized or licensed by the Companies Commission of Malaysia (CCM)/Syarikat Suruhanjaya Malaysia (SSM)6;
- Not be an undischarged bankrupt, convicted in or outside Malaysia of offenses mentioned in Section 198 the Act, or have ceased to hold a practicing certificate under Section 241 of the Act.
ROLES & RESPONSIBILITIES
On the most basic front, a company secretary holds high-level responsibilities to ensure that the company operates in compliance with the relevant laws and regulations with regard to, amongst others:
- the proper management of secretarial and corporate records;
- compliance with legal, regulatory and listing requirements;
- the administration of property administration and employee benefits;
- corporate conduct and governance mechanisms.
Not only that, but a company secretary also needs to actively participate in developing and implementing internal regulations for the company to ensure the company adheres to good corporate governance.
A corporate secretary owes a duty not only towards the company, but also its board of directors as well as its shareholders.
Towards the Board of Directors, a company secretary acts as the directors’ right-hand man in almost all areas of the running of the company. In this regard, a company secretary:
- has a duty to give impartial advice in the best interest of the company, particularly in a situation where there is a conflict of interest between the company interest and the director’s interest;
- provides logistical support to all the directors which go beyond scheduling meeting, such as providing the most relevant and up-to-date information to the directors to ensure the decisions are for the betterment of the company; and
- has a duty to ensure that new directors receive proper induction and training to enable them to perform their duties properly.
In certain cases, a company secretary is also expected to advise the directors on legal matters pertaining to the company and corporate governance. This usually applies when a company secretary is previously a legal practitioner who has experience in corporate governance and the relevant governing laws thereof.
As for the Shareholders, a company secretary has the responsibility to:
- ensure that the dividends, transfer, and allotment of shares of the shareholders are done in a timely manner and complies with the Act;
- prepare a proper company annual report for the shareholders to ensure that they are able to make informed decisions during shareholders’ meetings; and
- ensure that potential investors/ shareholders are given the proper and relevant information of the company, as this could draw them in for the company’s benefit.
In view of the important roles, the company secretary plays in business, many large companies and public listed companies require the company secretary to be suitably trained, experienced, and professionally qualified to take on these responsibilities.
As such, always make sure that the company secretary engaged for your business is professionally qualified and duly registered with one of the prescribed bodies, namely the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA), Malaysian Institute of Accountants (MIA), Malaysian Institute of Certified Public Accountants (MICPA), the Bar Council of Malaysia, Sabah Law Association, Advocates Association of Sarawak and the Malaysian Association of Company Secretaries (MACS).
1. Barnett, Hoares & Co v South London Tramways Co (1887) 18 QBD 815
2. Section 235, Companies Act 2016
3. Section 235 (1), Ibid
4. For at least 5 years if you possess SPM/ Sijil Tinggi Pelajaran Malaysia (STPM). If you possess a Diploma/ Degree in Law, at least 3 years; Company secretarial practice and management, at least 2 years; or Business administration or accounting, at least 1 year
5. Section 235 (2) (a), Ibid
6. Section 235 (2) (a), Companies Act 2016 and Section 20G, Companies Commission of Malaysia (Amendment) Act 2014