What Is a Corporate Secretary and Does My Company Need One?

 

A Corporate Secretary can be a valuable asset to a corporation as it grows. But what does a Corporate Secretary do, exactly? Are companies required to have one? We dive into the details of what a Corporate Secretary is and why they are important.

What Is a Corporate Secretary?

A Corporate Secretary is one of three essential senior positions typically found within a business organization. Along with the President and Treasurer, the Corporate Secretary rounds out the core officer positions that a company establishes when initially incorporating.

The Corporate Secretary works closely with c-suite executives and the Board of Directors to guide the company’s governance practices. A Corporate Secretary is knowledgeable of current governance trends and can advise board members on how to navigate potential issues.

 What Does the Corporate Secretary Do?

A corporation’s by-laws set forth the powers and duties of the Corporate Secretary. Corporate Secretaries have core responsibilities pertaining to the management of official corporate records and compliance. They may also serve as a resource to board members, providing advice on their specific responsibilities.

The primary responsibilities of the Corporate Secretary typically include:

1.) Arranging Board Meetings

The Corporate Secretary organizes and attends all Board of Director or committee meetings. The Corporate Secretary is often tasked with:

• Sending notice of stockholder and board meetings;
• Creating meeting agendas;
• Collecting and recording motions, votes and proxies; and,
• Signing meeting resolutions and certifications.

2.) Maintaining Corporate Records

Corporate Secretaries are responsible for maintaining all of a corporation’s important internal documents. Some of these documents include:

• Stock certificates and transfers;
• Business licenses;
• Corporate Minutes and resolutions;
• Shareholder correspondence; and,
• The corporation’s capitalization table.

3.) Advising Board Members

Board members in a corporation often come and go. An experienced Corporate Secretary may be responsible for onboarding new members and advising them on their fiduciary duties.

Many corporations also operate subsidiary companies. The Corporate Secretary may be responsible for ensuring that subsidiaries maintain good standing status and that their boards follow proper governance practices.

The company President may also assign the Corporate Secretary to perform additional duties. These include:

• Assisting in shareholder outreach;
• Making inquiries on behalf of the company;
• Preparing materials and presentations; and,
• Organizing or complying with company contracts.

 Corporate Secretaries and The Annual Meeting

State corporation laws require corporations to hold an annual meeting of shareholders. The Corporate Secretary plays an important role in organizing this event.

In addition to managing the logistics of the annual meeting, Corporate Secretaries are also responsible for preparing and distributing the necessary legal governing documents.

Is a Corporate Secretary a Board Member?

The Corporate Secretary is often not a board member. They do not even need to be a shareholder in the corporation.

A company’s Board of Directors elects a Corporate Secretary, often to a one year term. The Board typically renews the Corporate Secretary’s terms at the annual meeting.

Is the Corporate Secretary a Lawyer?

A company’s Corporate Secretary does not need to be a lawyer.

If a Corporate Secretary is a lawyer however, they may also serve as general counsel for the company. This often comes with increased responsibilities in areas such as securities compliance, mergers and acquisitions, and employee relations.

Do Companies Need a Corporate Secretary?

Many state corporation laws require companies to name a Corporate Secretary. These law also require corporations to hold an annual shareholder meeting, which the Corporate Secretary plays an important role in.