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Is the appointment of a company secretary a matter to be decided for the board of directors or the shareholders of the company?

Chapter 3 – Question 16

Written by Dr. Adv. Leigh Hefer & Jayne Hunter-Rhys. COMPANY SECRETARY’S HANDBOOK (2021). Published by Genesis Corporate Services.

  1. The board of directors. The appointment of a company secretary in public companies and state-owned companies is mandatory under the Act.
  2. The Act contains various provisions regarding the appointment, removal and duties of the company secretary.
  3. The company secretary has a pivotal role to play in the corporate governance of a company, and it is advisable that companies delegate or outsource this responsibility to an appropriate person, or organisation if a company secretary is not employed.
  4. The board should be assisted by a competent, suitably qualified and experienced company secretary. The appointment and removal of a company secretary is therefore a matter for the board.
  5. The board should be aware of the company secretary’s duties and should empower the company secretary to properly fulfil those duties.
  6. As gatekeeper of good governance, it is important for the company secretary to maintain an arms-length relationship with the board and its directors, as far as reasonably possible.
  7. The company secretary should assist the nomination committee and ensure that the procedure for the appointment of directors is properly carried out.
  8. The company secretary should assist in the proper induction, orientation, ongoing training and education of directors, including assessing the specific training needs of directors and executive management in their fiduciary and other governance responsibilities.
  9. The individual directors and the board collectively should look to the company secretary for guidance on their responsibilities and duties and how such responsibilities and duties should be properly discharged in the best interests of the company.
  10. The company secretary should provide a central source of guidance and advice to the board, and within the company, on matters of good governance and of changes in legislation.
  11. The company secretary should have a direct channel of communication to the chairman and should be available to provide comprehensive practical support and guidance to directors, with particular emphasis on supporting the non-executive directors, the chairman of the board and the chairman of committees and the audit committee.
  12. The company secretary should ensure that the Board Charter and Board Committee Charter and terms of reference are kept up to date.
  13. The company secretary should be responsible for ensuring the proper compilation and timely circulation of board papers.
  14. The company secretary should assist the chairman of the board and committees with drafting of yearly work plans.
  15. The company secretary should have the duty to obtain appropriate responses and feedback to specific agenda items and matters arising from earlier meetings in board and board committee deliberations. The company secretary’s role should also be to raise matters which may warrant the attention of the board.
  16. The company secretary should ensure that the proceedings of board and committee meetings are properly recorded and that minutes of meetings are circulated to the directors in a timely manner, after the approval of the chairman of the board or relevant board committee.
  17. The company secretary should assist the board with the yearly evaluation of the board, its individual directors and senior management.
    Source: Section 88 of Companies Act 71 of 2008

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