AS effective, strong corporate governance continues to be essential for sustainable development, not only for individual companies, but also for the economy as a whole, the role of the company secretary has received increased attention in Tanzania, not least due to the flow of new laws, regulations and standards of best practices, but also the growth in the power and anticipations of shareholders.
Indeed, the Business Laws (Miscellaneous Amendments) Bill 2011 assented to by President Jakaya Kikwete in June 2012 preserved the mandatory requirement for a company secretary in every company – public or private – as provided for in section 187 of the Companies Act No. 12 of 2002.
The role and functions of today’s company secretary have expanded from that of “minute-taker” to that of “strategic Board adviser” with explicit responsibility for, and influence on, corporate governance issues.
The Board of directors and, especially, the chairman, depend on the company secretary for support on many fronts. These include but are not limited to, performance of directors’ fiduciary duties; advising on legal, compliance and governance matters; assisting with obtaining the needed information from various stakeholders; and dealing with shareholder communications and engagement; as well as, interacting with proxy advisory firms.
There is no doubt that this expanded role of the modern day company secretary has apparently catapulted them into one of Tanzania’s foremost governance professionals within a company.
In the opinion of the Tanzanian parliament (Bunge), the preservation of this requirement shows the significance of the role of the company secretary and, veritably, section 187(2) of the Companies Act places on the directors of a public company the responsibility to ensure that the secretary has the “requisite knowledge and experience” to perform the duties of secretary of the company.
Although the Tanzanian Companies Act does not state expressly the duties of a company secretary, it imposes a number of obligations on officers of a company and penalties for non-compliance.
As the main focus of directors is on the core business and operational side of the company, it can be easy for them to overlook their statutory obligations; so here also the role of the company secretary becomes critical. It would seem that the role of the company secretary is, by and large, administrative.
Typically, the company secretary makes sure that the company complies with statutory or regulatory requirements contained in the Companies Act, such as, maintaining the register of members and minute books, making the requisite filings (e.g. annual returns, audited financial statements and certain statutory forms with respect to creation, modification or satisfaction of charges; and changes in directorships, situation of registered office, share capital, etc) with the Business Registration and Licensing Agency (BRELA).
In reality, however, the role of the company secretary has evolved into much more than simply ensuring compliance with the obligations imposed directly on the officers of the company by virtue of the Companies Act.
It is worth noting that today’s company secretary has assumed the responsibility for developing and executing robust systems to promote and sustain effective, strong corporate governance.
Interestingly, the Tanzanian Capital Markets and Securities (Corporate Governance) Guidelines, 2002, take cognisance of this. The Guidelines have helped the continuing efforts of companies in further building Board effectiveness and also embedded the company secretary in those efforts.
Whilst these Guidelines apply to Dar es Salaam Stock Exchange (DSE) listed companies, they are recognised as standards of best practices in corporate governance and should be followed by other companies where appropriate.