Company secretaries around the world wear two hats. In domestic operations, they work under the title of the company secretary. In international operations, they work as the general counsel. The dual responsibility is a corporate strategy or a matter of comfort to the professional is a long-time debate in the corporate world. The organisational structure shows the geographical and functional operation—the business size and sector demand for the dual role of a company secretary. The blog intrigues the readers with interesting information on the responsibilities and views of general counsel.
Responsibilities of a company secretary:
In different jurisdictions, the legal advisor of a firm is called by various names. In the United States, the name of the legal advisor is corporate secretary. In the United Kingdom, the legal advisor is the company secretary. In India, the legal profession is identified with the name of a company secretary. In some foreign countries, the name of a legal advisor is the “board secretary”.
In today’s modern world, the company secretaries take care of clerical tasks, corporate governance and global operations. The corporate secretary arranges meetings, does follow-up tasks, and shareholder relation activity and prepares for the next meeting.
- The company secretary checks the resolutions in the Articles of Association and coordinates to ensure the implementation of the resolution.
- The company secretary coordinates and invites the management committee, board of directors and AGM to the board meeting.
- The company secretary checks the compliance, relevant laws, and corporate governance practices of the company.
- Arrange training for the executives and directors in the relevant skills.
- The company secretaries inform the changes in the regulations and practices.
- The company secretary maintains important documents.
- Company secretaries prepare the minutes of the meeting.
- Company secretaries evaluate the performance of directors.
- Company secretaries take care of project management tasks also. Project management is taking care of the job within budget and on time.
- In matters related to legal and financial risk, the company secretary advises the board of directors.
- The public, private, listed and unlisted companies with a paid-up share capital of more than ten crores are supposed to appoint a company secretary.
- The company secretary informs the shareholders about the details of the stock exchange where the company shares are listed.
- A company secretary cannot manage an office in more than one company. A company secretary has the right to work in the subsidiary of the main company simultaneously.
Pros and Cons of clubbing dual roles:
Combining the dual responsibilities has the following merits:
- The cost savings demand for the expert candidate with dual functions. The single person managing governance and legal functions helps with cost-cutting strategies.
- The single person handling dual functions reduces the risk and enhances the cohesive approach.
- After thinking about the regulatory and legal considerations, the company secretary and general counsel make better-informed decisions.
- A single head handling dual responsibilities pays way to efficient workflow.
- A unified strategy with an emphasis on legal and governance improves the corporate governance framework.
The following points elucidate the cons of clubbing the dual roles:
- Combining dual responsibilities creates a conflict of interest.
- In big organisations, domain knowledge is essential for handling complex tasks. The limited expertise becomes a disadvantage.
- The workload affects the quality of work.
- While handling two areas there are chances to oversight one area.
- In some jurisdictions, as a part of checks and balances, it is essential to separate the roles.
Why companies should separate the role of a company secretary and a general counsel?
Lawyers or legal advisors can foresee the risks in legal operations. The board communication has privileged information. It is important to label the exchange of communication, documents and minutes properly. The separate roles protect the business information. Big companies separate the roles of a company secretary and general counsel for the following reasons: Independence, non-legal operations should not intervene in the performance, and project management.
The views of Company secretary of TATA Chemicals:
Mr. Rajiv Chandan is the company secretary and chief general counsel of Tata Chemicals. He had completed M.com at Mumbai University. He had completed a company secretaryship course at ICSI and a law course from Government Law College, Mumbai. He is leading a team of 23 talented professionals in his work. He works with 12 lawyers from India and three lawyers from USA, UK and Kenya. He is taking care of legal and global general counsel functions across India, the UK, Africa and the US. He addresses the issues in India, Kenya, the UK and the US. He understands the geographical diversity in legal operations.
He further discusses the challenges in the chemical industry. He says that TATA Chemical is in the inorganic and agrochemical sectors. The chemical industry is subject to environmental concerns and complex regulatory challenges. The safety and health risks demand robust compliance. He says that by aligning the legal operations, it becomes easy to streamline the best practices and processes and mitigate risks.
He points out the must-have traits for the role of a general counsel. He says that the combination of subject knowledge, regulatory expertise, business acumen, and strategic thinking is essential for a general counsel. Communication skills, team management skills, negotiation skills, commitment, global mind-set, leadership skills, and collaborative skills enhance the positive outcome of the role of a general counsel.
Bottom Line:
In big companies, the global pressure and multiple branches search for professionals with expert knowledge. After completing the company secretary course, the students get exposure to legal and global operations by experience. A company with experience are suitable for the dual role of company secretary and global counsel.