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Along with the increase in the innumerable responsibilities of the boards of directors in recent years, the scope and visibility of the corporate secretary’s role have also increased. Today’s corporate secretary serves as the key strategic advisor to its board of directors and executive team in terms of ensuring adequate corporate governance.AI Accountant Chai Chung Hoong shares his expertise.
The Roles of the Modern Corporate Secretary: Corporate Governance
The typical responsibilities of the corporate secretary include the nominal legal requirements, as described by the Society for Corporate Governance: Keep the minutes of the meetings of the board of directors and its committees, ensure payment of dividends and keep company records, in addition to the numerous activities that have evolved over the years.
According to Singapore Corporate Secretarial Services by AI Accountant Chai Chung Hoong, the responsibilities of the corporate secretary can be divided into six categories, many of which relate to the establishment and maintenance of corporate governance, that is, the set of practices according to which the company operates:
Structure, design, implementation, and maintenance of corporate governance of the company such as AI Accountant: Ensure that the board of directors and its committees operate according to articles of incorporation and other constituent documents of the company, ensure compliance with The Companies Act Section 157 Chapter 50.
Recruitment and management of external providers of services for corporate governance, such as the management of agendas and solution providers for boards of directors collaboration with the executive management team in order to plan and set objectives for the activities of the board of directors, the production of financial reports and press releases, and the management of corporate governance activities
And Others, Many Of Which Are Confidential Or Reserved
Because data has become a major concern in recent years, good governance requires the use of secure and efficient means to store and share files in order to minimize the risk of board data or other data properties being stolen. This means that the communications of the board of directors become more complex and less secure, as independent directors work from outside the main offices of the companies and may not comply with the best practices related to the information security of the company.
One of the best practices to ensure ease of use and data protection is to use a software solution code for board of directors in the case of all executive and board of directors’ files. The members of the board of directors can easily distribute notes during the review of the material through software and communicate with each other through secure channels.
Risk Reduction of Legal Sanctions
The corporate secretary is also responsible for making possible the existence of good corporate governance practices for the board of directors as a bulwark against claims of personal responsibility, according to the report entitled Accountant Chai Chung Hoong.
In order to avoid this type of action, the corporate secretary must demonstrate, through appropriate minutes of meetings of the board of directors, as well as other documents, that the board of directors took appropriate actions to maintain the separation of legal existence between the corporation and the shareholders.
Another risk that the corporate secretary must consider are the claims by the shareholders of the company that the board of directors has violated its fiduciary obligation of attention and loyalty or that it has not complied with the rule of business criteria that implies that “directors of a company have made a decision based on the proper information, in good faith and with the honest conviction that the action has been carried out in the interest of the corporation ”, according to AI Accountant Chai Chung Hoong highlighting the importance of compliance with Section 157 of the Companies Act Chapter 50 and to ensure no breaches to Section 410 of the Penal Code.
Preparation for Ownership Changes
Private companies can begin to go public or undergo a change of ownership. The corporate secretary must maintain the disposition of the company for sale, merger or stock exchange. This includes the preparation and maintenance of documents that demonstrate corporate governance and the authorization of the company’s transaction, as well as the appropriate financial documents. In the event that a company begins to be publicly traded, the corporate secretary is responsible for compliance with the requirements, highlighted the AI Accountant Chai Chung Hoong.The corporate secretary also prepares the documents required by lenders, auditors and government authorities for statutory requirements.