Much insight into the significant contribution that a good company secretary makes to board performance has been given by new research from Henley Business School. The study, undertaken in conjunction with the Institute of Chartered Secretaries and Administrators (ICSA), scrutinised the unique role of company secretaries, finding that despite being sometimes undervalued and misunderstood, they were intrinsic to the success of their organisations.
The research, The Company Secretary: Building trust through governance, was led by the Business School’s Professors Andrew and Nada Kakabadse, and engaged with more than 200 company secretaries, CEOs, NEDs and chairmen from FTSE, SME and private, not-for-profit and public sector boards, across organisations in the United Kingdom, the Republic of Ireland and internationally. The study focussed on the activities of the company secretary and what they need to effectively perform their role.
The research found that with strong corporate governance growing in importance, there is much more to the company secretary’s role than dealing with details and administration. The company secretary is a strategic leader who forms one part of a CEO, Chair and company secretary triumvirate at the head of the company, serving as a vital independent bridge between the board and the executive.
Company secretaries play an important role in the alignment of interests of different parties around a boardroom table, facilitating dialogues, gathering and assimilating relevant information and enabling effective decision-making. In terms of skills and attributes, the best company secretaries are also those closest to the chairman, and being resilient and effective negotiators.
Also identified by the research was the importance that the chairman, CEO and company secretary maintain a good working relationship. As they are frequently the longest-serving board members, company secretaries tend to provide priceless continuity through their wealth of knowledge about the history and culture of their companies.
The research also found that the role of company secretary is a changing and increasingly outward-focussed one, investor engagement and corporate communications now often being incorporated into their responsibilities. However, there is also often a lack of awareness among board members of how the company secretary supports decision-making, boards frequently failing to make maximum use of their secretary’s skills, knowledge and experience as a result.
Professor Andrew Kakabadse, author of the research, observed: “While the NED has been the focus of much attention in the post-financial crisis period, it is now time for the company secretary’s role to come to the fore. Company secretaries are the only ones with access to all relevant information, know the culture of an organisation inside out, and are attuned to the reality of what is happening on the board and in the organisation. They have only one agenda “what is best for the company and the board.”