10 Challenges Faced by Company Secretaries and How to Overcome Them

10 Challenges Faced by Company Secretaries and How to Overcome Them

10 Challenges Faced by Company Secretaries

Table of Contents

1. Understanding Conflicts of Interest

At the heart of many challenges faced by a company secretary lies the potential for conflicts of interest, which often occur when personal interests clash with the best interests of the company.

Typically, these situations involve:

  • Monetary Influences: Financial interests can sway decisions.
  • Recognition and Status: Desires for personal accolades or career advancements conflict with impartial decision-making.
  • Protective Behaviours: Efforts to safeguard personal positions or benefits often come at the cost of organisational welfare.

For instance, executives may push for decisions that benefit their personal agendas rather than the company’s long-term health. However, company secretaries are generally seen as pillars of integrity, prioritising the company’s welfare over personal gains.

In your role as company secretary, managing conflicts of interest effectively requires you to maintain a steadfast focus on what’s important for the company. Additionally, it is important to identify conflicts of interest that directors may not recognise. Regularly updating and maintaining these conflicts of interest, and ensuring they are stored in the required registers, is crucial.

Tip: Establish a robust system for declaring and managing conflicts of interest. Regularly update the register of interests and foster a culture of transparency to help pre-empt potential conflicts. Encourage board members to openly declare their interests to address these issues before they become problematic.

2. Managing Competing Demands

  • Business Versus Board Interests: Ensuring the company’s best interests while addressing board members’ expectations.
  • Personal Aspirations: Aligning career goals with the organisation’s needs.
  • Empowerment Challenges: Navigating the power dynamics between the Chairman, CEO, and the board.
Tip: To help you mitigate these challenges, prioritise tasks based on their impact on the company’s governance and strategic objectives. Implement effective time management techniques, to distinguish between urgent and important tasks. Additionally, advocate for proper recognition of your role within the organisation to elevate its perceived value, reducing the tendency for it to be overshadowed by more visible executive functions.

3. Lack of Empowerment

Tip: Proactively communicate the value you add through your work. Highlight successful examples where your efforts have positively impacted the company. Seek professional development opportunities to stay current with best practices and regulatory changes, thereby bolstering your authority and credibility.

4. Reporting Lines and Their Impact

  • Finance Director: May view the company secretary role through a cost-centric lens, undermining the broader governance responsibilities.

  • Legal Counsel: Creates potential conflicts of interest, especially concerning legal privileges and confidentiality.

Tip: Advocate for a reporting structure that aligns with best practices. Present a well-reasoned argument supported by industry standards to help you achieve this change. Highlight potential conflicts that arise from reporting to finance directors or legal counsel to strengthen your case.

5. Executive Leadership and Board Dynamics

  • Governance Rock: Providing stability and continuity in governance practices.
  • Advisor to the Chair and CEO: Ensuring that board meetings are productive and aligned with governance principles.
  • Mentor and Ally: Supporting directors and senior executives in understanding and fulfilling their governance roles.

Tip: Build strong relationships by developing trust and rapport with board members and senior executives. Be approachable and supportive to foster these connections. Act as a mentor to directors, helping them understand their governance responsibilities and how to fulfil them effectively.

6. Handling Sensitive Information

  • Being an Honest Broker: Facilitating open communication while maintaining confidentiality.
  • Keeper of Secrets: Balancing the need to share critical information with the obligation to protect the company’s interests.
  • Building Trust: Ensuring that board members and executives trust the company secretary to handle sensitive issues

Tip: Assess whether sharing the information is necessary for the company’s long-term sustainability. If it is, the decision to disclose becomes clearer. Build a reputation for discretion and trustworthiness to be seen as a reliable confidant, which is crucial for your role.

7. Managing Stakeholder Expectations

Tip: Maintain open lines of communication with all stakeholders. Provide regular updates on governance matters and be transparent about the company’s performance and strategic direction to build trust and align expectations. Stay well-versed in regulatory requirements and best practices to ensure the company remains compliant and can proactively address potential issues.

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8. Navigating Varied Governance Appetites

Tip: Navigate conflicts with tact and diplomacy. When you face resistance, present governance requirements as opportunities for improvement rather than obstacles. Frame discussions around how compliance can support strategic objectives without compromising the company’s goals and show how these solutions can be implemented efficiently and cost-effectively.

9. Guiding the Modern Governance Agenda

  • Cultural Resistance: Employees and board members may resist new policies or changes, especially if they perceive them as unnecessary or burdensome.
  • Lack of Awareness: Stakeholders might not fully understand the importance of ESG, DEI, and AI, leading to reluctance in embracing these initiatives.
Tip: Integrate ESG, DEI, and AI considerations into the company’s broader governance framework. Facilitate the establishment of dedicated committees to oversee these areas by coordinating with the board and senior management.

Educate the board and senior executives about the importance and benefits of ESG and DEI to foster a culture of inclusivity and sustainability. Approach challenges with tact, provide continuous education to stakeholders, and maintain effective communication to ensure successful implementation.
Boardroom Dynamics 2024 © Copyright Genius Boards 2024
Boardroom Dynamics 2024 © Copyright Genius Boards 2024

10. Maintaining Quality in Board Operations

  • Agenda Preparation: Ensure that board agendas and packs are comprehensive yet concise.
  • Minute Accuracy: Maintain precise and objective minutes, resisting pressures to alter content for personal agendas.
  • Priming the Board: Prepare the board to engage in meaningful discussions, focusing on strategic issues rather than operational details.
Tip: Adhere to best practices for minute-taking to ensure accuracy and objectivity. Carefully consider any changes requested by board members and implement them only if they do not compromise the integrity of the minutes. Develop a standardised format for board packs to streamline the preparation process and ensure consistency.

Concluding Thoughts on Embracing the Challenges

If you found this article helpful and want to learn more about how to empower your role as a company secretary, feel free to get in touch.

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Sharon Constançon

Sharon’s deep understanding of Board behaviours, leadership and regulated industries supports her delivery of truly deep, insightful and practical board evaluations. Sharon is a mentor and coach to Chairmen and Directors and champion of the Company Secretary.

Sharon has an MBA, is a Chartered Director and a Chartered Secretary. She shares her professional journey as a lecturer for the Qualifying Level Boardroom Dynamics course for the Chartered Governance Institute UK & Ireland. Sharon is on the Court and is Chairman of the Membership Committee of the Worshipful Company of Chartered Secretaries and Administrators (WCCSA) and is a member of the International Committee of the Chartered Institute for Securities and Investment (CISI).

She is a contributor to the Risk Coalition and course leader for programmes and seminars run by the Corporate Governance Institute in Ireland.

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