Introduction:
A company secretary is a professional with sophisticated responsibilities backed by law, typically serving as part of an organization's management team. Before the Companies and Allied Matters Act, 2020, ("The Act") was passed, every company, by virtue of the Companies and Allied Matters Act, 1990, was mandated to have a company secretary. Although it is no longer mandatory for private companies to have a company secretary, the Act mandates every public to have a company secretary with specific requirements for their qualifications, appointment and removal.
In this article, the role of company secretaries as well as their importance in ensuring regulatory compliance for your company, whether private or public will be thoroughly discussed.
Why is it important to have a company secretary?
- Company secretaries play a key role in fostering good corporate governance. One of the principles in corporate governance is risk assessment and management. Risk management is the process of identifying, assessing, and mitigating threats or uncertainties that can affect your organization. Company secretaries are trained to identify and manage risks, therefore, employing a company secretary is crucial in navigating potential regulatory and financial risks in doing business.
- It is mandatory for public companies: Having a company secretary is crucial for the effective management and administration of all companies, but only mandatory for public companies. This is in order to comply with the provisions of section 330 of the Act.
- To ensure accurate and timely regulatory compliance: Every sector or category of business in Nigeria has laid down rules, guidelines, regulations and regulatory bodies that oversee its affairs. One of the statutory duties of a company secretary is to ensure accurate and timely compliance with these regulations, e.g., filing annual returns which is mandatory for every registered entity in Nigeria, and financial statements for companies, attending company meetings etc.
Who Qualifies to Act as A Company Secretary?
There is no specific qualification for the secretary of a private company, however the directors of the company must take necessary steps in ensuring that the secretary of the company is a person who appears to have the requisite knowledge and experience to discharge the functions of secretary of a company. On the other hand, the secretary of a public company must either be:
- a member of the Institute of Chartered Secretaries and Administrators;
- a legal practitioner within the meaning of the Legal Practitioners Act;
- a member of any professional body of accountants established from time to time by an Act of the National Assembly;
- any person who has held the office of the secretary of a public company for at least three years of the five years immediately preceding his appointment in a public company; or
- a body corporate or firm consisting of members each of whom is qualified under paragraph (a), (b), or (c).
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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.
