What have company secretaries ever done for us?

Simon Laffin is a non-executive director at Watkin Jones, an AIM-listed property developer, and Dentsu Group, a Japanese listed global media network. Previously he has been chairman of Assura Group, Flybe Group and Hozelock Group, as well as a non-executive director at Aegis Group, Quintain Estates & Development, Mitchells and Butlers and Northern Rock (as part of the new Board restructuring the bank following its liquidity problems). He also worked in private equity with CVC Capital Partners as an industrial adviser. In his executive career, he worked for Safeway plc, serving as Group Finance and Property Director. He has an MA from Cambridge and is a qualified accountant.

Simon runs the Linkedin Group Boards and Board Directors. His first book, Behind Closed Doors. The boardroom: How to get in, get on and make a difference, opens the doors to the boardroom and explains such things as how to be a director, how to develop relationships with other board members and how to make the right decisions. It will appeal to anyone interested in the workings of the boardroom; current directors; aspiring directors; commentators on, and students of, business; and even enlightened regulators.

Miguel Florit asked him why the book doesn’t talk more about company secretaries given the integral part they play. So, in this guest blog, Simon elaborates on the value company secretaries can add to the board besides formalites and administration and offers insight and tips for anyone in the role of company secretary, or looking to advance their governance career.   

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Don’t you just love it when you put a whole year’s work to bed – or in my case to press – and someone strolls up and points out that you’ve missed something?

But it got me thinking; What have company secretaries ever done for boards? I mean apart from organising board and shareholder meetings, agendas, minutes, follow-ups, legal and governance compliance, updates, board appraisals, legal advice, statutory registers, company records and filings?

On top of these, the best Company Secretary and General Counsel are so much more.

A critical friend

While the executive management team is heavily driven to deliver results, the board needs a certain distance from this hurly burly. This independence usually comes from the non-executive directors, often described as critical friends to management. But company secretaries are also critical friends to the whole board. I remember one august company secretary had an eyebrow that raised up when the board sailed too close to the wind or was considering an unwise course. Other directors became sensitive to that red flag and its salutary effect was often enough to calm matters.

Another company secretary used to ask the board to clarify what it had just concluded ‘just for the minutes’. But we all knew he was asking the directors to think harder about that decision, and we often ‘clarified’ it into a slightly more measured result. Other company secretaries are more forthright and intervene more forcefully – it’s just a matter of style and reading the mood of the board.

The great thing about a friend is that they have your best interests at heart, but are prepared to tell you when you’re wrong. To me, that is the epitome of a great company secretary.

A dispassionate observer

When I was an executive director, I loved to pop into the company secretary and shoot the breeze a bit. From his legal and advisory viewpoint, the company secretary would always have a view on what was going on, and frequently had guessed most of what he hadn’t yet been told. It helped enormously in getting my own view straight to be able to talk to an informed individual who was not playing the corporate politics or pushing his own agenda. This can also be particularly important to the Chair, who may feel rather lonely and needs to just talk to someone.

This observer role can become particularly important, for example, if the company secretary becomes involved in the board appraisal process. If done in-house, the Chair needs administrative support, but also benefits from gentle dispassionate input from an insider. I have often used a company secretary to collate directors’ questionnaire responses and summarise them, keeping the identity of individual feedback confidential. But the real skill of a great company secretary here is to alert the Chair to specific issues without compromising that confidentiality. Nuanced feedback can be invaluable – for example a simple average score might be reported, but a quiet warning that the non-exec scores are very different to the executives would be doing everyone a favour, or that one individual’s scores are very different to others can alert the Chair to an issue.

A forward looker

This can be simply looking at the forward meeting agendas and warning relevant directors or executives about upcoming presentations or follow ups. It can also be more than this, in understanding how changing events will need to affect future agendas. This can include spotting new regulations and compliance and ensuring that the issues are discussed early enough to prepare the company, not just at the next meeting after they come into force. Maybe the company secretary feels that the board should respond to a consultation and lobby before a rule comes in. Perhaps the company secretary sees that a new acquisition will trigger new compliance or change in processes and can flag this as part of the acquisition approval, rather than a ‘gotcha’ realised too late. Too many companies manage by using their rear-view mirror. A great company secretary shines an early headlight on upcoming changes and future risks.

“The great thing about a friend is that they have your best interests at heart, but are prepared to tell you when you’re wrong. To me, that is the epitome of a great company secretary.”

7 top tips for company secretaries

1. Stay close to the CEO, but just as close to the Chair. You serve the board, not just executive management.
2. Maintain a little professional distance from all directors as you need to be impartial and trusted by all.
3. Speak regularly to the non-execs. They need your support and advice as much as any other, but may be cautious about seeking you out.
4. Check in with committee chairs regularly to discuss forward agendas for the rest of the year. Use this to think about how agendas may need to adapt to changing circumstances.
5. If given the opportunity to work on board appraisals, seize it with both hands. It gives you a chance to work confidentially with the chair, but also to get an insight and closer relationship with other board members. You can also demonstrate your impartiality, discretion and insight.
6. If you think that something is not right or that a poor decision is being made, do something about it. It may be that you need to speak up in a board meeting, or speak quietly to the CEO, Chair or even Senior Independent Director. Choose the best option, but don’t do nothing.
7. Believe in yourself and gain confidence. You are a vital part of the board, not just a notetaker and administrator. Yes, you’re watching the board’s back, but you also have a role in looking forward and thinking about how things will change, so you are also a spotlight on the future.

‘Behind Closed Doors. The boardroom: How to get in, get on and make a difference’ is available via all leading bookshops or Simon’s website.