The future role of the company secretary

18 July 2014

Speakers outline their vision for the rapidly changing company secretary role

Susan Swabey, Company Secretary of Smith and Nephew plc and ICSA President, David Venus outlined their vision for the rapidly changing company secretary role at Equiniti’s recent Share Registration Conference.

Susan Swells Susan Swabey, Company Secretary of Smith and Nephew

Do you think the role of the company secretary has evolved in recent years with a greater emphasis on corporate governance?

Susan Swabey: There have been many changes in the last few years affecting the company secretary. There is often no time to assimilate one change before something else comes down the line, often on the same topic but from a different source. The role is no longer the same year in, year out. When I started 30 years ago it was pretty much the same job every year. Now there are new reporting requirements, hot topics and practicalities every year.

There is an increased focus on governance by major investors and therefore company secretaries are called upon to engage with investors ahead of the AGM more than in the past. This year I was contacted by over 20 investors and investor bodies ahead of the AGM.

This increased engagement in governance by investors has changed the role of the company secretary. We’re no longer just the ‘techie’ guys in the backroom. Even though we must not feel that this is our natural home, now we have got to get out and about and talk to people. We have to train our directors to talk about governance to investors. They don’t want to talk about it, they want to talk about strategy and products and markets and things like that. But, we have to train them to speak the governance language and that’s a new part of our role.

The company secretary is moving away from merely taking the minutes and recording the decision others make, but is now writing papers, guiding the discussions and advising the board on governance matters.

David Venus:  Not that long ago the company secretary was a mere servant of the board. Well within living memory company secretaries in some of the top 100 companies even sat on a different table to take the minutes. Things have changed. When did they change? They started to change before the Cadbury Report but that was the real catalyst. Corporate governance were two words we probably hadn’t heard much about before, and it quickly became part of the role of the company secretary to make sure appropriate corporate governance was carried out through the organisation.

This has been hastened by the financial crisis. So we’ve certainly seen the company secretary move away from being chief administrative officer. We’re now seeing the company secretary as the chief governance officer, but they have to be much more than that. Now they need soft skills as well. The big thing that has changed in the last five years is boardroom behaviours and ICSA is in the forefront of that, we help write the papers. Now the company secretary needs to be psychic, needs to be a trusted advisor, éminence grise, truth-speaking under power, brave but diplomatic and the bearer of unwelcome advice. But, you’ll be respected for it, not always thanked, but respected. So it’s a very broad role indeed.

What are your thoughts on the future role of the company secretary?

Susan Swabey: It is going to continue to evolve. The issues of the financial crisis and public recognition that there’s something wrong with big business (whether right or wrong, there is that perception), mean governance is going to be around and impact our roles. Investors and the public are focusing on governance matters as well as the strategy and performance, so the board will be more interested. It is going to be up to us to make sure the board is equipped to tackle these questions when they meet the investors. We won’t have to just have the technical skills to write the corporate governance statement, but also the communication skills to engage with investors and explain the technical aspects, not just to them but to the board.

We’re now seeing the company secretary as the chief governance officer, but they have to be much more than that. Now they need soft skills as well.

David Venus: Going forward I think the key administrative task I hope we still see the company secretary doing is minute taking.

It wasn’t my favourite task, but it is very necessary and I think company secretaries have the breadth of knowledge of the business and the sort of nuanced skills required to write the minutes. I would like to see much more emphasis on soft skills and I would like to see the Institute’s exams incorporate some testing of soft skills.

I have always been surprised that more company secretaries haven’t progressed to other board roles like non-executive director.

Who better to know what goes on than the company secretaries who have been sitting there for years and understand how everything works? Non-exec is a different role, but what isn’t such a different role is chairman.

A chairman is a facilitator and that’s what a company secretary is too. We should be looking to be non-execs but our endgame should be to seek to be chairman.

If you would like more information please contact your relationship manager or doug.armour@davidvenus.com

Ezine issue: July 2014