Company Secretary (CoSec)

In the landscape of Australian corporate governance, the Company Secretary (often abbreviated as CoSec) is a pivotal "officer" of the company, distinct from a clerical secretary or personal assistant. Far from being a purely administrative function, the modern Company Secretary acts as the chief governance specialist, a strategic advisor to the Board of Directors, and the primary guardian of a company’s compliance framework.

Under the Corporations Act 2001 (Cth), the Company Secretary holds significant legal responsibilities and liabilities. They serve as the bridge between the Board, executive management, shareholders, and regulators such as the Australian Securities and Investments Commission (ASIC) and the Australian Securities Exchange (ASX).

The Legal Definition and Requirement

In Australia, the legal necessity of appointing a Company Secretary depends on the company structure.

Public Companies

Under Section 204A(2) of the Corporations Act 2001, a public company must appoint at least one Company Secretary. At least one of the appointed secretaries must ordinarily reside in Australia.

Proprietary (Private) Companies

Under Section 204A(1), a proprietary company (usually denoted by ‘Pty Ltd’) is not required to appoint a Company Secretary. However, many proprietary companies choose to do so to ensure better governance and compliance.

  • If a proprietary company chooses not to appoint a secretary, the directors of the company assume the responsibilities and liabilities typically assigned to the secretary.

  • If a proprietary company does appoint one or more secretaries, at least one must ordinarily reside in Australia.

Who Can Be Appointed?

A Company Secretary must be a natural person (not a corporation) who is at least 18 years old. A person is disqualified from holding the role if they are currently disqualified from managing corporations under Part 2D.6 of the Act (e.g., due to bankruptcy or conviction of certain offences).

The Appointment Process

The appointment of a Company Secretary is a formal governance proceeding.

  1. Consent: Before appointment, the individual must give their signed written consent to act as secretary (Section 204C). The company must keep this consent on file.

  2. Board Resolution: The appointment is made by the Directors, typically via a formal [Link to: Board Resolution] or during a board meeting.

  3. ASIC Notification: The company must notify ASIC of the appointment within 28 days using Form 484 (Change to Company Details). Failure to lodge this form within the timeframe can result in late fees and penalties.

Core Duties and Responsibilities

The duties of a Company Secretary are broad, covering statutory compliance, board administration, and strategic governance. These duties are derived from the Corporations Act, the company’s [Link to: Company Constitution], and contract law.

1. Statutory Compliance (ASIC)

The Company Secretary is responsible for the company’s relationship with ASIC. Under Section 188 of the Act, the secretary can be held personally liable for contravening specific requirements, including:

  • Maintaining the registered office (Section 142).

  • Lodging financial reports (Section 319).

  • Notifying ASIC of changes to share structure, director details, or addresses.

  • Maintaining the company's statutory registers (Register of Members, Register of Option Holders, etc.).

2. Board and Committee Support

The CoSec ensures the smooth functioning of the Board's decision-making process. This is where modern board management software like BoardCloud becomes an essential tool for the Secretary. Responsibilities include:

  • Agenda Management: Collaborating with the Chair to develop the agenda for Board and Committee meetings.

  • Board Packs: Collating and securely distributing board papers to directors prior to meetings.

  • Minutes: Taking accurate and legally compliant Board Minutes of all meetings of directors and members.

  • Resolutions: Facilitating Circular Resolutions for urgent decisions outside of scheduled meetings.

3. ASX Listing Rules (For Listed Entities)

For companies listed on the ASX, the Company Secretary acts as the primary liaison with the exchange. They are responsible for:

  • Continuous Disclosure: Ensuring the company complies with ASX Listing Rule 3.1, notifying the market immediately of any information that a reasonable person would expect to have a material effect on the price or value of the entity’s securities.

  • Trading Policies: Monitoring compliance with the company’s Securities Trading Policy.

The "Officer" Status and Fiduciary Duties

It is critical to understand that a Company Secretary is defined as an "Officer" of the corporation under Section 9 of the Corporations Act. Consequently, they owe the same fiduciary duties to the company as the Directors.

These statutory duties, found in Sections 180–183, include:

  • Care and Diligence (s 180): To exercise their powers with the degree of care and diligence that a reasonable person would exercise in that role.

  • Good Faith (s 181): To act in good faith in the best interests of the corporation and for a proper purpose.

  • Use of Position (s 182): To not improperly use their position to gain an advantage for themselves or someone else, or to cause detriment to the corporation.

  • Use of Information (s 183): To not improperly use information obtained through their position (e.g., inside information) for personal gain or to harm the company.

Breaching these duties can lead to civil penalties, criminal charges, and disqualification from managing corporations.

ASX Corporate Governance Principles: Recommendation 1.4

The ASX Corporate Governance Council’s Principles and Recommendations (4th Edition) elevates the role of the Company Secretary significantly. Recommendation 1.4 states:

"The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board."

This recommendation clarifies that while the CoSec may report to the CEO or CFO for administrative matters (like payroll or office management), their primary reporting line regarding governance is to the Board.

According to the ASX guidelines, the role includes:

  • Advising the Board and its committees on governance matters.

  • Monitoring that Board and committee policy and procedures are followed.

  • Coordinating the timely completion and despatch of board and committee papers.

  • Ensuring that the business at Board and committee meetings is accurately captured in the minutes.

  • Helping to organise and facilitate the induction and professional development of directors.

The Strategic Shift: From Admin to Advisor

Historically, the Company Secretary role was viewed as administrative—focusing on "keeping the books." In the modern Australian corporate environment, the role has evolved into that of a strategic advisor.

The "Conscience of the Company"

The CoSec is often described as the "conscience of the company." They are frequently the only person present at board meetings who is not a director, placing them in a unique position to offer impartial advice on ethics, conflicts of interest, and governance standards.

ESG and Risk Management

As Environmental, Social, and Governance (ESG) criteria become central to investment strategies, the Company Secretary often leads the charge in reporting and compliance. They ensure the Board considers non-financial risks, such as climate change impact and modern slavery reporting, which are increasingly mandated by Australian law.

Cybersecurity Governance

With the rise of cyber threats, the CoSec plays a role in ensuring the Board is educated on cyber risk. This extends to the security of the Board's own communications. Using encrypted platforms like BoardCloud for the distribution of sensitive board packs is now considered a standard of care for modern Company Secretaries to prevent data leaks.

Qualifications and Professional Bodies

While there is no strict legal qualification required to be a Company Secretary of a proprietary company, public company secretaries usually possess qualifications in law, accountancy, or business administration.

The leading professional body for this role in Australia is the Governance Institute of Australia (formerly Chartered Secretaries Australia). Many top-tier CoSecs hold the post-nominal FGIA (Fellow of the Governance Institute of Australia) or GIA(Cert).

Comparison: Company Secretary vs. General Counsel

In many Australian companies, the General Counsel (head lawyer) and Company Secretary are the same person. However, the roles are distinct:

  • General Counsel: Acts as the company's lawyer, protecting the company's legal interests in contracts, litigation, and employment.

  • Company Secretary: Acts as the company's governance officer, serving the Board and ensuring statutory compliance. When one person holds both roles, they must be careful to distinguish when they are providing legal advice (which attracts legal professional privilege) and when they are performing administrative secretarial duties (which generally does not).

Frequently Asked Questions (FAQ)

1. Does a small Pty Ltd company need a Company Secretary?

No, it is not a legal requirement for a proprietary (Pty Ltd) company to appoint a Company Secretary under the Corporations Act 2001. However, if one is not appointed, the Directors are responsible for all the duties and obligations that would otherwise fall to the secretary. Many small companies appoint one to ensure ASIC compliance is managed correctly.

2. Can a Director also be the Company Secretary?

Yes. In a proprietary company, it is very common for a Director to also be the Company Secretary. In a public company, this is also permitted, provided the person is appointed properly. However, for governance checks and balances, larger public companies often prefer the roles to be separate.

3. What is the liability of a Company Secretary in Australia?

As an "officer" of the corporation, a Company Secretary has the same fiduciary duties as a Director (care and diligence, good faith, etc.). They can be personally liable for civil penalties or criminal charges if they breach the Corporations Act. They are also specifically liable for administrative failures, such as failing to lodge documents with ASIC.

4. Can a Company Secretary sign contracts on behalf of the company?

Yes. Under Section 127 of the Corporations Act, a company can validly execute a document if it is signed by:

  • Two directors; or

  • One director and one company secretary. This makes the CoSec a critical signatory for major business contracts, financing deeds, and property transactions.