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 officer positions typically found within a corporation. Along with the President and Treasurer, the Corporate Secretary rounds out the core officer positions that a company appoints 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 should be knowledgeable of current governance trends and should advise board members on how to navigate potential issues.
Does My Company Need a Corporate Secretary?
Your company must appoint a Corporate Secretary if state laws require it, but beyond compliance, this role is pivotal for seamless governance. A Corporate Secretary keeps your business in line with regulations and ensures that all essential documents are accurate and filed on time.
Appointing a Corporate Secretary can add value no matter your company’s size. In smaller firms, Corporate Secretaries often wear multiple hats, blending roles to keep the company organized and primed for growth.
What Does the Corporate Secretary Do?
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.
A corporation’s by-laws establish the powers and duties of the Corporate Secretary. 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 notices 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 often 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
The members of a corporation’s Board of Directors often come and go. An experienced Corporate Secretary may be responsible for onboarding new members and advising them on their fiduciary duties as directors.
4.) Managing Subsidiaries
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.
5.) Additional Responsibilities
The company President may also assign the Corporate Secretary to perform additional duties, including:
- Assisting in shareholder relations and 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 an agenda for the Annual Meeting,
- Distributing the necessary legal governing documents, and
- Preparing the minutes of the Annual Meeting.
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 corporation’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 a Corporate Secretary an Executive Officer?
Yes, the Corporate Secretary is often considered a senior officer in the company. The Corporate Secretary often has responsibilities pertaining to corporate governance and record keeping comparable to that of a Chief Executive Officer or Chief Financial Officer.
Is the Corporate Secretary a Lawyer?
The Corporate Secretary does not need to be a lawyer. However, if a Corporate Secretary is a lawyer, they may also serve as the company’s general counsel. 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 laws also require corporations to hold an annual shareholder meeting, which the Corporate Secretary plays an important role in.
Can a Corporate Secretary and Treasurer Be the Same Person?
Yes, one person can hold multiple officer titles in a corporation, including both Corporate Secretary and Treasurer. It is often the case in small business corporations that one person occupies multiple senior officer positions in the company. For example, it is possible to have a one-person corporation in which one individual is the sole shareholder and director of the company and holds all of the officer titles.