The roles of director and secretary in a company are not the same and involve different responsibilities. However, a director can also act as a company secretary, provided they carry out the necessary duties and obligations of both roles.

A public company must have at least one company secretary. At least one company secretary must ordinarily reside in Australia. A proprietary (private) company does not need a company secretary, but each director must assume the responsibilities of the secretary if one is not appointed. As companies answer to strict regulations and obligations, the role of the company secretary has become increasingly important in providing support to the good governance of the board. As such, it is important to understand the responsibilities of directors and secretaries to understand the best way to structure the management of your company.

What Are the Responsibilities of a Company Director?

Company directors guide and monitor the management of a company. They must comply with relevant legislation and fulfil their directors’ duties. Some of the key directors’ duties include:

  • acting in good faith, in the best interests of the company and for a proper purpose. This duty ensures that directors avoid conflicts of interest.
  • acting with care and diligence. This duty makes sure that directors do not expose companies to any unnecessary risk or liability.
  • using the position of director properly, without abusing their power or compromising the interests of the company.
  • preventing the company from trading while insolvent.

What Are the Responsibilities of a Company Secretary?

Company secretaries ensure that a company is compliant with all relevant laws and regulations. As an officer of the company, a company secretary must also fulfil many of the duties directors have.

However, to ensure the good governance of the company, a company secretary has several unique reporting obligations, including:

  • maintaining a registered office, and notifying the Australian Securities and Investments Commission (ASIC) of any change of company address within 28 days;
  • for proprietary (private) companies, notifying ASIC of changes to the member register or share structure;
  • informing ASIC of the personal details of directors and secretaries;
  • notifying ASIC of the issuing of shares; and
  • lodging financial reports with ASIC.

As well as these reporting obligations, secretaries also have important internal responsibilities within the company. Company secretaries must:

  • ensure that meetings are properly called and held. There are a variety of procedural requirements that must be met to hold a board meeting;
  • ensure that agendas and minutes are prepared properly;

For example, properly signing and approving meeting minutes and storing record books correctly. There are also requirements regarding what board minutes should record.

  • advise directors on their compliance obligations; and
  • aid the good governance of the board.

Why Keep the Roles of Company Director and Secretary Separate?

As mentioned previously, a proprietary company does not have to appoint a company secretary, and directors can assume the reporting and notifying responsibilities that a secretary would typically undertake. However, a separately appointed company secretary can take a more thorough and rigorous approach to manage the role’s duties. As a company grows and its reporting obligations become more onerous, the role of company secretary ideally should be a standalone position. You want a company secretary that can focus solely on continuing good governance and compliance.

Key Takeaways

While there can be overlap between the roles of company director and secretary, the two positions are different and have distinct responsibilities. While a public company has to have a company secretary, a proprietary company does not. However, the compliance obligations of a company secretary are ever-increasing as companies answer to a variety of laws and regulations. As a result, secretaries have to bring a particular skill-set to ensure the good governance of the company. If you have any questions about appointing a company secretary, get in touch with LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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