Company Director & Company Secretary: What’s The Difference?
A company director and a company secretary are two different executive people with other responsibilities in the company management and secretarial services. Although the board of directors and corporate officers may have some duties and legal requirements in common, their roles are distinct. As with many positions, it is necessary to clarify the main differences between these two vital positions for any owner or manager of a business.
The Nature of Employment of a Company Director
Leadership and Strategy
Directors are assigned to oversee the operation and management of the business and provide new direction. They are responsible for making critical management decisions at the company, establishing goals, and setting up new policies that will help the firm achieve success.
– Making strategic and operational decisions
– Establishing goals and reference points and everything involved therein
– Budgeting of funds
– Recruiting and providing governance to senior management
Legal Responsibilities
Company directors are also legally bound to some responsibilities by the Companies Act.
These include:
– The court of equity must act within the powers of their jurisdiction as provided for by the law of the specific country they are doing business in.
– The fiduciary principle of utmost loyalty is the duty to advance the firm’s success.
– Professional misconduct that entails a provision that allows a legal practitioner to refuse to act for any person where there is a conflict of interest.
– It is unlawful for the directors to neglect their legal responsibilities. Directors are legally liable if they do not fulfill such legal requirements.
The Nature of Employment of a Company Secretary
The company secretary is a key player since he or she is responsible for offering advice and making recommendations on vital issues.
Governance and Compliance
The company secretary deals with compliance and legal matters and seeks to ensure that the company achieves the proper compliance standards with the law, corporate governance, and statutes.
Key duties include:
– Ensuring that the company has kept all records and registers as required by law
– Identifying and managing the regulatory filings and submissions process which is critical to meeting legal requirements on time
– Assisting the board in matters that relate to corporate governance
– Formulating and implementing policies and procedures
–Scheduling company meetings and recording the minutes
Board Support
The company secretary also has a responsibility to assist the board of directors in their functioning.
Responsibilities include:
– Producing board papers and documents so they are ready for board meetings
– Offering suggestions concerning legal obligations of the board as well as sound governance
– Assisting in the orientation of new directors and providing continuing education for directors
– Offering the board legal updates and advice that may be relevant in the running of the organization
– Allotting time to ensure that directors and shareholders are in touch
Key Differences
Company directors and secretaries perform different core tasks, even though they collaborate.
– Directors are responsible for the overall management of the firm and must develop strategies and make crucial decisions. Secretaries play a vital role in supporting operations and governance.
– Directors are elected by shareholders. Directors often hire secretaries unlike other employees.
– Some legal requirements are for the director to fulfill, and they are held legally accountable for their compliance. Secretaries are generally not held to blame for situations in most scenarios.
– Directors work with resources outside the organization and its environment. Secretaries have an inward-outward orientation of internal governance mechanisms.
Thus, directors are at the helm of corporate management, while secretaries maintain organizational order and compliance with legal standards.
Conclusion
Company directors and secretaries are distinct but function harmoniously and are equally necessary. The role of directors promote the provision of business leadership mainly through decision-making, strategy, and financial management. Secretaries provide clerk and consultative services to ensure legal compliance, good governance, and effectual functioning.
It is critical to comprehend these fundamental differences to construct viable and workable resolutions of the anticipated roles and liabilities in a company’s administration. This means companies can streamline the efforts of directors and secretaries since both these official positions must work hand-in-hand to establish leadership objectives and goals while keeping an eye on the most influential corporate governance procedures.
