The role of a company secretary is essential in ensuring the smooth functioning of a company. A company secretary is responsible for ensuring that the company adheres to statutory and regulatory requirements, maintaining corporate records, facilitating board meetings, and managing communication between the company and its stakeholders.
The law in Ghana, specifically the Companies Act (Act 992), sets out the qualifications needed to become one. These qualifications are like a recipe for what makes a good company secretary, spelling out the education, skills, and ethics required to excel in this pivotal role. In this article, I shall explore the qualifications of a Company Secretary mandated by the Companies Act and answer the fundamental question of whether these qualification requirements are justified.
Who qualifies to be a Company Secretary?
A company secretary in Ghana is required to have at least one of these qualifications:
- Educational qualifications: A person is required to have obtained a bachelor’s degree or any tertiary level qualification from an accredited institution that equips the person with the necessary knowledge and experience to be able to perform the functions of a Company Secretary.
- Professional qualifications: The Act requires a company secretary to have obtained a certificate or membership from the Institute of Chartered Secretaries and Administrators (ICSA) or the Institute of Chartered Accountants Ghana (ICAG), both of which are recognized bodies related to corporate governance and administration. Another professional qualification requirement is that the person must be a duly registered and active member of the bar as a barrister or solicitor in good standing in the country.
- Experience: A person is also required to have held office as a Company Secretary trainee or served under the supervision of a qualified Company Secretary for a period of at least three years. Additionally, based on one’s academic or professional, a demonstration of the capacity to perform the functions of a secretary could entitle one to such an appointment.
In addition to the above regulatory mandates, I contend that a person being considered must have the following additional qualifications:
- Legal and regulatory knowledge: A thorough understanding of Ghana’s Companies Act, relevant company practices, corporate governance guidelines, and other regulatory frameworks is crucial for the proper execution of a company secretary’s duties.
- Communication and interpersonal skills: Effective communication, both written and verbal, and strong interpersonal skills are crucial for a company secretary. A person needs to know how to communicate effectively with the board of directors, shareholders, government authorities, and other parties.
- Ethical standards and integrity: Upholding high ethical standards and maintaining the confidentiality and integrity of the company’s operations are fundamental aspects of the role. Company secretaries are required to act with honesty, transparency, and accountability at all times.
Are these qualifications justified?
The qualifications stipulated for a company secretary in the Companies Act (Act 992) of Ghana are justified and play a crucial role in ensuring legal compliance, effective governance, and proper communication within a company. The justification for these qualifications lies in the complexity and importance of the role of a Company secretary within a company. Below are some reasons why the qualifications are necessary:
- Legal compliance: In Ghana, like many other countries, there are specific laws and regulations governing corporate activities including the Companies Act. The qualification criteria ensure that company secretaries have the necessary knowledge and expertise to navigate and adhere to these legal requirements.
Having qualified individuals as company secretaries who are well-versed in Ghana’s legal framework ensures that companies comply with these legal requirements, fostering a culture of lawfulness and good governance and minimizing the risk of legal issues or disputes. The business environment is subject to regulatory changes and updates. Qualified company secretaries are more likely to stay informed about these changes and accordingly adapt company practices – thus reducing the risk of non-compliance and legal issues.
- Good corporate governance: Well-qualified company secretaries contribute to effective governance by providing expert advice, facilitating smooth board operations, and assisting in strategic decision-making processes in line with the current legal requirements.
They organize and coordinate board meetings, ensure proper documentation of board resolutions, and assist in the development and implementation of governance policies and procedures to promote transparency, accountability, and ethical conduct at all levels. Having individuals with the necessary qualifications ensures that these essential board functions are carried out efficiently and effectively.
- Effective stakeholder relations: Effective communication is a fundamental aspect of a company secretary’s role. They are the point of contact between the company, its shareholders, regulatory authorities, and other stakeholders. Qualified company secretaries are well-equipped to handle these communications, ensuring clarity and accuracy in the dissemination of information.
They are responsible for accurate record-keeping, ensuring that stakeholders have access to necessary information, and overseeing compliance with financial and disclosure requirements. This transparency fosters trust among stakeholders and contributes to a healthier business environment.
- Professionalism and competence: Having well-qualified company secretaries enhances the overall professionalism and credibility of the company. Stakeholders, including investors, suppliers, customers, and regulatory bodies, are likely to have greater confidence in a company that has qualified professionals managing its secretarial functions. The qualifications criteria provide assurance of the competence and accountability of company secretaries.
This, in turn, enhances the overall corporate culture, as these professionals are better equipped to guide companies in making informed decisions and fulfilling their legal obligations.
- Risk management: Competent company secretaries possess skills in risk management, which is vital for advising the board on potential risks and helping in informed decision-making. This proactive approach aids in navigating challenges and uncertainties that businesses often face and ultimately contributes to the stability and sustainability of the company.
- Ethical conduct: Emphasizing ethical standards and integrity in the qualification criteria for a company secretary is essential for building a culture of trust, responsibility, and fairness within the organization. Ethical standards require the company secretary to be honest and truthful in all interactions and communications, transparent in all dealings, and accountable for all actions taken. This ensures that the company secretary, as a key professional, operates with the highest moral and ethical values, contributing to the overall reputation and success of the company.
Conclusion
The role of a company secretary is not merely a position; it is a commitment to uphold ethical standards, legal compliance, and transparent governance, essential for the sustained growth and success of businesses in Ghana. It is evident that these qualifications serve as a necessary foundation for a company secretary to function effectively.
However, flexibility in the criteria, periodic reviews, and opportunities for further professional development can further enhance the effectiveness of a company secretary, ultimately benefiting the organization and its stakeholders. With a skilled and qualified company secretary, organizations can strive for not just compliance, but also for responsible and sustainable growth.
>>>the writer is a level 300 LLB Student at the Kwame Nkrumah University of Science and Technology (KNUST) and interning at Sustineri Attorneys PRUC (www.sustineriattorneys.com).
