The Role Of Company Secretaries In Nigerian Corporate Compliance

Corporate compliance refers to the process by which a company ensures that its operations, policies, and practices adhere to all relevant laws, regulations, standards, and ethical norms governing its business activities. It is simply "doing business the right way", that is, following the rules set by the government, regulators, industry bodies, and the company itself. Corporate compliance covers everything from statutory filings and tax obligations to workplace safety, data protection, anti-money laundering measures, etc. Corporate compliance has become a core element for sustaining successful businesses in Nigeria's evolving economic and regulatory environment.

The company secretary is entrusted with protecting corporate integrity, promoting governance practices, and ensuring the organization consistently complies with the relevant legal and regulatory framework.

Features of the Company Secretary under the Companies and Allied Matters Act 2020

1. Appointment of Company Secretary: Section 330 of the Companies and Allied Matters Act 2020 (the Act) provides that every company must appoint a company secretary, except for small companies. A company qualifies as a small company under section 394(3) of the Act where;
   1. It is a private company
   2. Its turnover is not more than N120,000,000 or such amount as may be fixed by the commission from time to time
   3. None of its members is an alien (foreigner)
   4. Its net asset value is not more than N60,000,000 or such amount as may be fixed by the commission from time to time
   5. None of its members is a government, Government Corporation, agency or its nominee.
   6. For companies having a share capital, the directors between themselves hold at least 51% of the equity share capital.

The implication of the above is that any company where a foreigner is involved cannot be categorized as a small company and must mandatorily appoint a secretary. However, it is important to note that a company secretary must be resident in Nigeria.

Under the Act, the company secretary is recognized as an officer of the company, and their actions, or omissions, can have significant legal implications. By law, a public company cannot operate effectively without appointing a qualified individual or firm as a company secretary. Where a public company fails to appoint a secretary, the company and its directors will be liable to a fine or penalty to be specified by the Commission.

2. Qualification of a Company Secretary (for Public Companies): It is the duty of a director of a company to take reasonable steps to ensure that the secretary of the company is a person with the requisite knowledge and experience to discharge the functions of a secretary of a company. Under Section 332 of the Act, the company secretary of a public company must possess the required professional qualifications or experience, such as:

• Being a member of the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN).
• A person who has served as a company secretary in a public company for at least three years.
• A legal practitioner
• A chartered accountant
• A corporate firm of Chartered Secretaries, Accountants, and Legal Practitioners.

3. Removal of a secretary (public companies): Section 333 of the Act provides for the appointment and removal of a secretary. Where it is intended to remove the secretary of a public company, the Board of Directors shall give him notice stating the following:

1. Intention to remove him
2. The grounds on which he is to be removed
3. A period of 7 working days to make his defense
4. An option to resign from his office within seven working days.

Where a company secretary, after receiving notice from the Board, fails to resign within the stipulated period or does not submit any defense, the Board may remove the secretary from office and report the removal at the next general meeting. However, where the secretary submits a defense but the Board finds it unsatisfactory:

• If the intended removal is based on fraud or serious misconduct, the Board may proceed to remove the secretary from office immediately and must report the action to the next general meeting.
• If the intended removal is based on any other ground (other than fraud or serious misconduct), the Board cannot remove the secretary without the approval of the general meeting. In such cases, the Board may suspend the secretary pending the decision of the general meeting, and the removal, if approved, takes effect from the date of the general meeting.

4. Duties of a secretary: Section 335 of the Act outlines the company secretary's core responsibilities, including:

• Attend meetings of the company, the board of directors and its committees.
• Render all secretarial services in respect of the meetings.
• Advise on compliance.
• Maintaining statutory registers and company records as may be required.
• Render proper returns and give notification to CAC as may be required.
• Carry out administrative and other secretarial duties as directed by the director.

Other Duties of a Company Secretary

Beyond the duties of the company secretary stipulated above, the company secretary plays a strategic role in ensuring that an organization complies with statutory obligations, maintains good corporate governance, and mitigates regulatory risks. Some of the key duties of a company secretary include:

1. Statutory and Regulatory Filings: A company secretary ensures that the company fulfils all its necessary filing obligations, including:
   1. Filing annual returns and other post-incorporation filings with CAC.
   2. Ensuring full compliance with specific regulations such as the Securities and Exchange Commission, Central Bank of Nigeria, Nigeria Data Protection Commission, etc, where applicable.
2. Advisory and Support: Where a company secretary is a lawyer, he/she often act as a legal adviser to the board of directors and management, ensuring that the company's operations, decisions, and policies align with applicable laws and regulations. His role goes beyond administrative duties and extends into legal guidance to protect the company's interests and mitigate risks. Some of these roles include:
   1. Interpreting the provisions of the Companies and Allied Matters Act 2020 and other relevant statutes.
   2. Ensuring the board is aware of its legal obligations
   3. Monitoring changes in legislation and updating management on their impact.
   4. Preparing and vetting contracts, agreements and other legal instruments.
   5. Providing legal opinions to guide board resolutions, policies, and strategic initiatives.
   6. Advising on matters relating tomergers, acquisitions, restructuring, and joint ventures.

Conclusion

For public companies in Nigeria, appointing a company secretary is not merely a statutory requirement under the Act; it is also a decision that can significantly impact the company positively. A company secretary is usually a corporate compliance expert who ensures that the company operates within legal and regulatory boundaries while fostering transparency and accountability.

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.