The role of the company secretary in promoting good corporate governance in South Africa

Abstract

The global prevalence of corporate scandals involving misconduct has drawn public attention to corporate governance, highlighting the role of the company secretary as a key corporate governance officer. However, company secretaries are often overlooked, despite their importance for facilitating corporate governance. The term ‘secretary’ itself is misleading, as it suggests a purely administrative position. Prior to the role’s development, the connotation was correct. Company secretaries were known as the administrative officer of the company. The implication of this has been, and remains, that the role is not fully leveraged. This view contrasts with the multifaceted functions company secretaries perform today in corporate governance matters and beyond. The emphasis on corporate governance has resulted in modern company secretaries taking on a range of positions with broader powers and extensive duties transforming their roles into guardians of corporate governance. The position is already incorporated into governance codes, the recent Companies Act 71 of 2008 and practice. However recent corporate failures raise concerns whether the role of the company secretary within South Africa's corporate governance framework has the potential to fulfil this corporate governance expectation. This research report will discuss how factors such as the historical marginalisation, legal ambiguity, lack of knowledge and framework fragmentation of the role has contributed to its underutilisation and undervaluation. Effectively hindering it from reaching its full potential within corporate governance and relegating it to the status of an unrecognised hero despite its significant role in corporate governance. This research report further examines the role of the company secretary within the corporate governance framework, highlighting its potential to succeed in this crucial corporate governance position and proposing improvements to maximise this potential. This research report asserts that selection, implementation and utilisation of a suitable company secretary can prevent or mitigate instances of poor corporate governance and, in some cases corporate scandals, bringing to the fore a new corporate ‘governance hero’.