The Company Secretary, very broadly speaking, is usually responsible for official administrative matters. It is generally the
duty of the Secretary to maintain company minute books and statutory registers and to prepare and lodge any
necessary returns required by CAC, such as changes to directors and the filing of confirmation statements and
accounts.
The Secretary is responsible to the Directors and is expected to keep the Directors advised of changes in
company law affecting the running of the company.
A nominee Company Secretary is often appointed in order to fulfill this role in a professional capacity. This is a service that we
provide and we strongly recommend that this option is considered especially if you wish to utilize our Managed Compliance
Service. The service should certainly be considered in if the Directors are not familiar with the maintenance of statutory records or minutes.
Any company may still choose to appoint a Company Secretary, but if none is appointed it is important to note
that the duties and responsibilities previously placed on the Secretary are still applicable and must be carried out
correctly by the Director.
The requirement to Appoint a Company Secretary
A company is an artificial person created by the operation of law. To subsist as a person in law, it must conform to the provisions of the law since it derives its existence from it.
Human agents, called "directors", are appointed by the shareholders (owners) to see to the efficient running of the affairs of the company. They are expected to handle the company's affairs in accordance with statutes, other regulations and best practices, and the company's articles of association.
These are all specialized references that require skills beyond the ability to read in order to understand and interpret. Directors and members are not necessarily trained for this purpose. Consequently, there is a need for a secretary, who is more or less the company's compliance officer with the requisite skills.
The position of the company secretary is created by law (Sections 293-298 of the Companies and Allied Matters Act (CAMA) Cap C20 Laws of the Federation of Nigeria, 2004) and provides for the appointment and functions of the secretary and imposes a duty on the directors to ensure the competence of the secretary.
Therefore, every company is required to appoint a secretary (Section 293(1)). In the case of a public company, CAMA stipulates the minimum requirements and qualifications for the holder of the office of the secretary (Section 295).
The Nature of the Roles, Functions, and Duties of the Company Secretary
The secretary is an officer of the company that plays a significant role in the governance and administration of the company's affairs with particular responsibilities in three major areas: the company, the board, and the shareholders. The statutory responsibilities of the company secretary are stipulated in Section 298 of CAMA.
In addition, the Securities and Exchange Commissions Code of Corporate Governance for Public Companies 2011, while recognizing the statutory duties, imposes additional roles on the secretary (Articles 8.2 and 8.4).
Responsibilities of the Company Secretary to the company
The secretary's responsibilities to the company will vary from simple to complex. The secretary ensures that the company complies with appropriate regulations, notably provisions of CAMA and other specific legislations and regulations which are peculiar to the industry in which his company operates.
For example, the company secretary of a bank should be conversant with the provisions of the Banks and Other Financial Institutions Act (BOFIA), LFN, 2004, the Central Bank of Nigeria (CBN) Act, the National Deposit Insurance Corporation (NDIG Act: as well as various guidelines and policies and regulations issued by the CBN from time to time.
A company secretary in the insurance industry must of necessity be familiar with the Insurance Act the NAICOM Act and NAICOM Rules, etc. In addition, each of them should be conversant with the provisions of the respective codes of corporate governance applicable to their industries.
To this end, the statutory functions of company secretaries will vary from company to company but the central objective is to achieve compliance with the various laws and regulations which affect the business and corporate activities of the company.
The nature of compliance includes the rendition of statutory returns to the appropriate government and regulatory bodies, e.g. the Corporate Affairs Commission, the Nigerian Stock Exchange (for listed companies), the Securities and Exchange Commission, the Central Bank of Nigeria, etc.
In a nutshell, every company secretary should be conversant with the respective codes of best practice and/or governance applicable to the industry to which his company belongs.
Responsibilities of Company Secretary to the board
The secretary coordinates the activities of the board by providing support to the chairman and other directors (both collectively and individually) and also making available to all directors relevant and necessary documents to enable them to discharge their functions.
It is also his responsibility to provide professional advice on statutory compliance matters to the board. He ensures that adequate information is given to all the board members in sufficient detail and in a timely manner. As a matter of standard and general practice, the secretary must in relation to his duties to the board do the following:
- Communicate board decisions to the management.
- Obtain the board's approval on matters that are reserved for the directors before implementation.
- Advise the directors generally on matters of procedure and best practice. This is why it has become anachronistic to assume that the secretary should only be seen and not heard.
- In conjunction with the chairman, he is to ensure that board meetings are conducted
properly. - Attends and takes minutes of meetings of the board and its committees.
- Handles other administrative functions that may be referred to him by the board and management.
The nature of the secretary's role to the board of directors is basically that of advice and coordination. To this extent, the secretary should not merely wait to be asked questions but should look for opportunities and be proactive in correcting wrong steps and decisions taken or about to be taken by the directors. Company law is majorly relevant and that is why CAMA becomes one of the working tools of the secretary.
Responsibility of the Company Secretary to the shareholders
The secretary is the shareholders' reference point. He handles all correspondence with members of the company in relation to the issuing of shares, calls on shares, replacement of share certificates, management of company shareholding accounts, payment of dividends, production and issuance of annual reports, etc. If the company is listed, some of these functions are handled in conjunction with the registrars.
To be able to discharge his duties to all stakeholders competently, the secretary must be conversant with the codes and principles of corporate governance, the memorandum and articles of association, and, as stated earlier, the various laws and regulations which affect the status, relationships and business activities of the company.
Appointment and Qualification of a Company Secretary
By the provisions of Section 295 of CAMA, its the responsibility of the directors to ensure that the company employs a suitably qualified company secretary. Where no specific qualification is specified for the secretary of a private company, the secretary of a public company shall be:
- A member of the Institute of Chartered Secretaries and Administrators of Nigeria;
- A legal practitioner within the meaning of the Legal Practitioners Act, 1975;
- A member of the Institute of Chartered Accountants of Nigeria or other bodies of accountants as are established from time to time by an Act;
- Any person who has held the office of the secretary of a public company for at least three 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 above.
It should therefore be noted that an individual, a partnership, or a corporate body can be appointed as the secretary of an organization.
Procedure for appointment
- Appropriate board resolution;
- Filing prescribed. Form CAC 2.1 within fourteen days with the Corporate Affairs Commission;
- Entries are made in the register of directors and the secretary;
- Notification to third parties - bankers, stock exchange (where applicable), etc.;
- Service contract formalized in the case of an individual.
It should be noted that a company director may also be a company secretary, provided that there is at least one other director.
A provision requiring or authorizing a thing to be done by or to a director and the secretary is not satisfied by its being done by or to the same person acting both as director and as, or in place of the secretary (Section 294 CAMA 2004).
Removal of a Company Secretary
The removal of the company secretary requires that the procedure under Section 296 of CAMA is followed, namely, a notice of seven days must be given, and where the secretary is to be removed from office for gross misconduct, the directors upon removing him shall repo to the members at the next annual general meeting.
The Status of the Company Secretary
The status of the secretary has evolved over the years. In the years past, he was regarded as a mere servant of the company, but this perspective has changed since. A company secretary is a much more important person nowadays than he was in previous years.
He is an officer of the company with extensive duties and responsibilities. He is certainly entitled to contract with the administration side of the company's affairs, such as employing staff and ordering cars, and so forth. All such matters now come within the ostensible authority of a company's secretary.
The secretary is an officer of the company. He could be held liable because the Companies and Allied Matters Act places an obligation on him to provide advice to the board and the company. As an officer of the company, he would also be liable for acts of the company, especially where he omits or neglects to act or fails to act in good faith.
The company secretary has ostensible authority which means that third parties can assume that he is properly authorized to act on behalf of the company. The secretary has the authority to sign any document required to be signed by a company and he can authenticate a resolution (Section 294 of the Companies and Allied Matters Act, LFN 2004).
Core Duties of the Company Secretary
- The company secretary ensures that all procedures regarding meetings are followed and that the requirements of the CAMA and the articles of association are complied with.
- The secretary is expected to attend meetings of the company, the board of directors meetings as well as meetings of committees of the board and to also take minutes of such meetings.
- The secretary is responsible for communicating the board's decisions as and when due and also ensuring the execution of the instructions of the board.
- The secretary is responsible for ensuring that the company complies with the rules and requirements of regulatory bodies.
- The secretary keeps custody of and maintains statutory registers of the company.
- The secretary ensures the proper use and safe custody of the company seal.
- The secretary is responsible for notifying the regulatory authorities of appointments and other announcements regarding the company.
- The secretary coordinates the production and distribution of the company's annual report.
- The secretary is responsible for managing all correspondence and communication with shareholders.
- The secretary is responsible for shares registration and supervises the activities of the company's registrar if the company is listed.
- The secretary may also be responsible for other administrative matters which the board may delegate from time to time.
Liabilities of the Company Secretary
The company secretary is liable to the same extent as the directors for offenses arising from default in connection with requirements of the Companies and Allied Matters Act, 2020.
The extent of liabilities (fines) will vary depending on the offense committed. In most cases, offenses under the law are uninsurable since it will be illegal to insure against illegal actions. Therefore, the secretary as an officer of the company may be liable for the criminal acts of the company. Liability often arises out of negligence more than acts.
