While much is written about the value company secretaries offer
to board and management, there is less awareness of the multiple
ways in which they can specifically support the work of financial
directors and auditors. In fact, the stronger the link between the
financial director and the company secretary, the more streamlined
the auditing process and year end will be. As such, a close and
effective working relationship between the two is something every
company should strive to cultivate in the interest of enhancing
company performance and optimising governance and compliance
In recent years an increased emphasis has been placed on
transparency, especially with regard to financial statements. While
the finance director's perspective will naturally be from a
transaction basis, the company secretary's key objective is to
ensure that transparency is maintained throughout preparation of
the statements and the annual returns, and that there is a full and
accurate audit trail comprising all transactions.
One very important aspect of the role of a company secretary is
maintaining the company's minute books and recording of
business transactions including granting loans to subsidiaries,
acquisitions and the payment of dividends to shareholders. Before
any such transactions can be implemented, approval must be sought
from the directors, usually at a directors' meeting or via
written resolution. In this regard, the company secretary will
often act as a crucial interface between the finance/tax
departments and the board. In addition the company secretary will
record all approvals granted by the directors in the minutes. When
the accounts are being reviewed at year end, evidence must be
furnished to prove that any transactions appearing within the
financial statements were formally approved, and properly kept
minute books are fundamental to this.
When the annual accounts are being prepared, company secretaries
will liaise closely with the finance department to ensure all
statutory information contained within the accounts is correct.
They will also be responsible for co-signing the annual returns
with a company director, certifying the attached financial
statements, and ensuring Compliance Statements made by the
directors are included. As all accounts must be filed with the
Registrar of Companies by prescribed deadlines as set out in the
Companies Act 2014 and the relevant tax acts, the company secretary
will work to see that those deadlines are rigorously adhered
As the importance of establishing a strong culture of corporate
governance and compliance grows, underpinned by a new Companies Act
which imposes greater liability on directors as well as stricter
penalties, the value offered by the company secretary at all levels
of the company grows too. An expert source of advice and assistance
regarding all governance and compliance requirements, company
secretaries also bring to the table a vibrant network of
connections between different parts of a company, from shareholders
to boards to management to all the various departments. This gives
them the ability to actively work towards both greater cohesion and
greater transparency- cornerstones for any companies moving forward
and for any financial directors moving towards year end, annual
returns and audits.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Stephen discusses the what, why and where in respect of open book accounting in public sector contracts. He also considers the practical drafting steps when drafting open book clauses in contracts and the possible remedies to include in the drafting.
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