1. Report Writing
On
Securities & Exchange Commission of Pakistan
Group Participants:
Wajih Ul Hassan BSE181024
Hamail Naqvi BSE181022
Mohammed Srosh BSE181028
Sohaib Shaikh BSE181037
2. Abstract
The Securities & Exchange Commissionof Pakistan(SECP) is the financial
regulatory agency in Pakistan whose objective is to develop a modern and
efficient corporatesectorand a capital market based on sound authority principles,
in order to encourage investment and foster economic growth and prosperity in
Pakistan.
3. Contents
1. Introduction.................................................................................................................................5
2. Establishment...............................................................................................................................6
3. Memorandum Associations & Article Association of a Company......................................................7
3.1. Introduction..........................................................................................................................7
3.2. Memorandum of Association for the purpose of company registration in Pakistan....................7
4. Organization...............................................................................................................................12
5. Functions...................................................................................................................................13
6. INCORPORATION OF A COMPANY................................................................................................14
6.1. Availability of Name ............................................................................................................15
6.2. Documents for registration of a limited company..................................................................16
6.3. Additional RequirementsforIncorporationOf aCompanyhavingobjectsof providingSecurity
Services ..............................................................................................................................17
6.4. Documents forincorporation of a Single Member Company..................................................17
6.5. Transfer of membership of Single Member Company to a new member.................................18
7. Table of Fee ...............................................................................................................................20
7.1. Availability of Name Fees.....................................................................................................20
7.2. Registration Fees :...............................................................................................................20
7.3. Registration Fees for foreign companies:..............................................................................21
7.4. Registration Fees for Associations not for Profit under Section 42 : ........................................21
7.5. Other Fees:.........................................................................................................................21
8. Registering a new company.........................................................................................................24
8.1. Step 1: Approval of CompanyName.....................................................................................24
8.2. Step 2: Submission of Documents.........................................................................................24
8.3. Step 3: Certificate of Incorporation.......................................................................................25
8.4. Step 4: Deposit of Shares.....................................................................................................25
8.5. Step 5: Registration of Income, Sales, andProfessional Taxes ................................................25
9. Alternatives to company registration in Pakistan..........................................................................25
9.1. Branch Office......................................................................................................................25
9.2. Liaison -Office .....................................................................................................................26
10. The role of the company secretaryin Pakistan- current perspectives.............................................28
10.1 Adding value through key relationships................................................................................29
4. 10.2 Building the relationship with the directors.........................................................................29
10.3 Relationship with independent directors.............................................................................30
10.4 Relationship with the independent Director and non-executive directors..............................30
10.5 Relationship with independent directors and Chairman .......................................................30
10.6 Building relationshipswith the Board of directors âConclusion.............................................31
5. Introduction
The Securities and Exchange Commission of Pakistan (SECP) was set up in
pursuance of the Securities and Exchange Commission of Pakistan Act, 1999. The
SECP was initially responsible for the regulation of corporate sector and capital
market. Over time, its mandate has expanded to include supervision and regulation
of insurance companies, non-banking finance companies and private pensions. The
SECP has also been entrusted with oversight of various external service providers
to the corporate and financial sectors, including chartered accountants, credit rating
agencies, corporate secretaries, brokers, surveyors etc
6. Establishment
The Securities and Exchange Commission of Pakistan (SECP) is the successorto
the erstwhile CorporateLaw Authority (CLA), which was an attached department
of the Ministry of Finance. The process ofthe CLA's restructuring was started in
1997 under the Capital Market Development Plan of the Asian Development
Bank (ADB). The parliament passed the Securities and Exchange Commission of
Pakistan Act, which was promulgated in December 1997. Consequently, the SECP,
having an autonomous status, became operational on January 1, 1999.[1] The Act
gave the organization the administrative authority and financial autonomy to carry
out the reform program for Pakistanâs capital market.
The scopeofthe authority of the SECP has been gradually widened. The insurance
sector, non-banking financial companies, and pension funds have been added to the
purview of the SECP. Now the SECP's mandate includes investment financial
services, leasing companies, housing finance services, venture capital investment,
discounting services, investment advisory services, real estate investment
trust[2] and assetmanagement services, etc. The SECP also regulates various
external service providers that are linked to the corporatesector, like chartered
accountants, rating agencies, corporate secretaries and others.
7. Memorandum Associations & Article Association of a Company
Introduction
The business proposedto be undertaken by a company is mentioned in clause III of
its Memorandum of Association, which relates to objects of a company. The
Companies Ordinance, 1984 (the Ordinance) allows a company to alter the
object clause of its Memorandum of Association with the approval of the
Securities & Exchange Commission of Pakistan (SECP), on the petition filed
by a company within 60 days of the passing of Special Resolution, for the
reasons provided under section 21 of the Ordinance and the procedurelaid
down under rule 3 read with
rules 28, 30 and 32 of the Companies (General Provisions and Forms) Rules,
1985 (the Rules).
Memorandum of Associationfor the purpose of company registrationin
Pakistan
Every company requiring registration in Pakistan whether as Private Limited
company, Public Limited company or any other form of company must prepare
memorandum of association. Memorandum of association of any company is
basically the constitution of the company or a kind of foundation upon which the
structure of the company is based.
The important thing to know is that a company once registered can only undertake
those businesses that are mentioned in the memorandum of association of the
company,so all those businesses that the company proposes to take shall be
mentioned in the memorandum of association. The contents of memorandum of
8. association of any company shall be in compliance with the companiesâ ordinance,
1984. The memorandum of association should have following contents:
1.The name of the company that required registration and also whether it is a
company limited by shares, limited by guarantee or any other form of business.The
place also specifying the province where the registered office of the company is
going to be.
2.The basic objective of the registration of the company or in other words the
reason why the company is to be registered and the business it is going to
undertake. In case the company is going to be registered as Private Limited
company or any other form of company the fact shall also be mentioned that the
company is limited company and that the liability of the members of the company
is going to be limited up to the amount of unpaid capital in case of Private Limited
company.
3.The amount of share capital shall also be mentioned in the memorandum of
association with which the company proposes to get registered. The distribution of
the share capital into share of definite amount is also mentioned in the
memorandum of association.
4.Every subscriber or shareholder mentioned in the memorandum of association of
the company shall take at least one share it is not possible to take half share. The
number of shares each member of the company proposesto take shall write
oppositeto his name that how many shares have been taken by him. Company
Registration in Pakistan Conditions for alteration in Memorandum of Association
for company registered in Pakistan:
9. Companies registeredin Pakistanare allowedto make alterationin their
memorandum of associationforthe following reasons:
o A company registered in Pakistan can make changes in its memorandum to
carry on business more economically or more efficiently.
o Registered companies in Pakistan can make alteration in its memorandum of
association to attain its purposeby new or improved means.
o Changes are also allowed in the memorandum if the company registered in
Pakistan is proposingto enlarge the area of its operations.
o A company can also make changes in the memorandum of association to
carry on any other business which can be conveniently be carried with the
existing business of the company.
o Similarly modification can also be made in the memorandum of association
of the company to restrict or abandon any business mentioned in the
memorandum of association.
o Changes are also made by companies in their memorandum of association to
sell or disposeof whole or part of their business.
o Sometimes changes are also made in the memorandum of association of the
company registered in Pakistan to amalgamate its business with any other
company.
10. The Securities and Exchange Commission of Pakistan (SECP) has chalked out
standardized models Memorandum of Association for 27 sectors including textile,
auto and banking companies etc, facilitating submission of documents for speedy
registration of companies with the commission.
According to an SECP, Memorandum of Association is the constitution of a
company. It is the main document, which provides information about name,
situation of registered office, objectives, liabilities and authorized capital of a
company. A company cannot be incorporated without having a Memorandum of
Association.
The commission has also drafted instructions for adopting specimen of
Memorandum and Articles of Association for obtaining licence under section 42 of
the Companies Ordinance, 1984. This initiative of the SECP will facilitate
promoters in preparation and submission of documents for registering a company.
In case, promoters adopta standard model Memorandum of Association for its
proposedcompany, examination by the concerned registrar will be easy, leading to
quick processing and the company could be registered on the same day if all other
documents are also complete.
On the other hand, if promoters file their own Memorandum of Association, it may
consume more time to study and examine the same before a company is registered.
Presently, the model Memorandum of Association have been provided for auto and
allied sector, banking company, chemical and pharmaceutical, communication and
IT, construction, engineering, exchange company (A & B type), fuel and energy,
insurance, leather, leasing, textile (composite, spinning and others), transportation,
security services, power generation, synthetic and rayon, jute, fishing, livestock,
11. poultry and breeding and venture capital businesses. The SECP said that the model
Memorandum of Association of a Not-for-Profit Association have also been placed
on the website. The commission is planning to develop and provide such model
Memorandum of Association for the remaining sectors also in the near future.
12. Organization
The SECP is a collegiate bodywith collective responsibility. The operational and
executive authority of the SECP is vested in the Chairman who is the SECP's chief
executive officer (CEO). At present, he is assisted by four Commissioners to
oversee the working of various operational units as may be determined by him.
The SECP is divided into the following divisions:
ï· Company Law Division
ï· Securities Market Division
ï· Specialized Companies Division
ï· Insurance Division
ï· Adjudication Division
ï· Prosecution and Legal Affairs Division
ï· SupportServices Division
13. Functions
SECPâs main functions include; regulation of securities market and related
institutions like Central Depository Company (CDC), Credit Rating Companies
and Modarabas (funds operating on the basis of Islamic economic principles);
administration of the company law; regulation of non-banking finance companies
like leasing companies, investment banks and mutual funds, regulation of
insurance business and private pensions. One of the important functions of the
SECP is the incorporation/registration of companies. This task has been entrusted
to the Registration Department, Company Law Division which has its field
offices known as Company Registration Offices (CROs) for the purpose of
incorporation / registration of different type of companies. Since the
inception of SECP, a number of operational changes have been introduced and a
friendly environment has been created at the CROs. Incorporation of
companies has been made much easier, smooth and swift ensuring
completion of this process within three days. Other public services like
availability of name, providing of certified copies etc., are rendered within
one day. eServices has been launched by the SECP in Sep.2008, which
facilitates online availability of name, online incorporation of companies
and e-filing of statutory returns. It enables the promoters and management
of the company to interact online using the eServices portal, without visiting
the SECP offices. Online services save time and resources, increase efficiency,
create a paperless environment, promote confidence and strengthen the countryâs
economy
14. INCORPORATION OF A COMPANY
For the convenience of general public, promoters and directors of companies,
SECP has established its eight CROs at Islamabad, Karachi, Lahore, Peshawar,
Faisalabad, Multan, Sukkur and Quetta. Online facilities for incorporation of
companies and filing of returns have been made available. Registration of
companies and monitoring of their working according to law, functions of CROâs
include providing services and guidance and also to ensure that the companies and
their directors comply with the statutory requirements as provided under the
Companies Ordinance, 1984 (the Ordinance). The record of companies
maintained by the CROs is public record and the investors, shareholders, creditors
and general public, may inspect the record of any company whenever they
need and they may also obtain certified copy of any specific document on
payment of nominal amount of fee. Any three or more persons associated for
lawful purposemay, by subscribing their names to the Memorandum of
Association and complying with the requirements of the Ordinance form a
public company and any one or more persons so associated may, in like
manner, form a private company. If only one member forms a private company,
it is called a single member company and if more than one member forms it then it
is termed as a private company. Prior approval of the Ministries/Departments etc.
noted againsteach category of the followingcompaniesis required to be
obtained before incorporation of companies: -
a) A banking company I) Ministry of Finance
II) State Bank of Pakistan
b) A non-banking finance Securities and Exchange
15. company (NBFC) Commission of Pakistan
(c) A security service providing
company
Interior Division
(d) A corporate brokerage house Stock Exchange (for transfer of
member ship card in favour of
proposed company)
(e) A money exchange
company
State Bank of Pakistan
(f) An Association not for
profit u/s 42 of the
Companies Ordinance, 1984
License from Securities and
Exchange Commission of Pakistan
(g) A trade organization u/s
42 of the Companies Ordinance, 1984
License from Ministry of Commerce
Following are the requirements for registration of a new company under the
Companies Ordinance, 1984:-
Availability of Name
The first step with regard to incorporation of a company is to seek the
availability of the proposed name for the company from the registrar. Forthis
purpose, an application is to be made and Rs.200/- for online application and
Rs.500/- for offline application is required to be paid for seeking availability
certificate for each name. The promoters desirous of forming a company should
make sure that the name chosen is not otherwise inappropriate, deceptive or
designed to exploit or offend the religious susceptibilities of the people and
16. neither is identical nor closely resembling with the name of an existing
company. To facilitate the promoters, a list of prohibited/ sensitive names
has also been provided at the link:
https://www.secp.gov.pk/ns/pdf/Prohibited_words.pdf
Documents for registration of a limited company
The following documents are required to be filed with the registrar
concerned for registration of a private limited company:-
I. Copy of nationalidentity card or passport, in case of foreigner, of each
subscriber and witness to the memorandumand article of association.
II. Memorandum andarticles of association
Four printed copies of Memorandum and Articles of Association in case of offline
submission and one copy for online submission, duly signed by each subscriberin
the presence of one witness. In order to facilitate the public. The standardized
specimen of Memorandum of Association of various sectors have been provided
on the Commissionâs Website.
III. Form - 1
Declaration of compliance with the pre-requisites for formation of the company.
IV. Registration/filing fee
A copyof the original paid Challan in the any branch of MCB Bank Limited or a
Bank Draft/Pay Order drawn in favor of the Securities and Exchange Commission
of Pakistan of the prescribed amount. (Table-I).
17. V. Authorization by sponsors
The authorization of sponsors in favor of a personto make good the deficiencies,
if any, in memorandum and articles of association as may be pointed out by the
registrar concerned and to collect the certificate of incorporation.
Additional Requirements for Incorporation of a Company having
objects of providing Security Services
In case of security object company nine additional sets of each of the documents at
i and ii above along with the bio-data, four attested photographs of each
subscribers and financial position/bank statement of the subscribers (Aggregate
wealth should not be less than 1.5 million) is required to be provided. Ministry of
Interior grants NOC for a security object company.
Documents for incorporation of a Single MemberCompany
Any personmay form a single member company and would file with the registrar
at the time of incorporation a nomination in the form as set out in Form S1
indicating at least two individuals to act as nominee director and alternate nominee
director, of the company in the event of his death. All the requirements for
incorporation of a private limited company shall mutatis mutandis apply to a single
member company.
18. Transfer of membership of Single Member Company to a new
member
If the membership of a single member company is transferred to a new member,
the company shall, within fifteen days from such transfer, also file with the
registrar, a nomination in the form as set out in Form S1.
Change in status of a single member company
A single member company can be converted into a private company on
increase of the number of its members to more than one. The
company shall pass a special resolution for change of status and alter its articles
accordingly within thirty days and transfer the shares within seven days. The
company shall appoint and elect one or more additional directors within fifteen
days of passing the special resolution and notify the appointment on Form
29 prescribed under the Companies (General Provisions and Forms) Rules, 1985
(the Rules) within fourteen days. Further, the company is required to file a
notice of the fact in writing in the form as set out in Form S2, with the
registrar within sixty days from the date of passing of special resolution.
Company becoming a single member company
A private company having two or more members shall convert its status
into single member company by passing a special resolution for change of its
status, making necessary alteration in its articles and obtaining the approval of
the Commission. An application for seeking Commissionâs approval shall be
19. submitted by the company in the form as set out in Form S4 within thirty days
of passing the special resolution for change of status to single member
company. The company shall transfer shares in the name of single member within
fifteen days of the approval of the Commission and notify change in the board of
directors on Form 29 within fourteen days from date of transfer of shares. A
certified copy of the order containing the approval together with a notice in
the form as set out in Form S5 and a nomination of nominee directors in the
form as set out in Form S1 shall be filed with the registrar concerned within
fifteen days.
Obtaining Certified Copies of Memorandum & Articles of
Association and Certificate of Incorporation
In order to obtain certified copies of memorandum of Association, articles of
association and certificate of incorporation, challan of the requisite copying
fee and Court stamps fee of the requisite value should be furnished along with
registration documents.
ï· Documents for incorporation of an association not for profit
All the documents meant for incorporation of a limited company along with a
license issued by the SECP. In case of a trade body, a license issued by Ministry of
Commerce would also be submitted to the registrar concerned. The application for
obtaining the requisite license from the Commission should be accompanied by
draft memorandum and Articles of Association, list of promoters, bio-data of each
promoter, declaration, names of companies in which the promoters of the proposed
association hold any office, estimates of annual income and expenditure and brief
20. statement of work already done or to be done. (Section 42 & Rule 6). Detailed
guidance is provided on the link:
http://www.secp.gov.pk/divisions/Portal_RD/registration_promoters.asp
Table of Fee
Availability of Name Fees
Online submission
(Rs.)
Manual submission
(Rs.)
200 500
Registration Fees :
Online submission
(Rs.)
Manual submission
(Rs.)
For registration of a
company whose nominal
share capital does not
exceed 100, 000 rupees , a fee
of -----
2,500 5,000
For registration of a
company whose nominal
share capital exceeds 100,
000 rupees , the additional
fee to be determined
according to the amount of
nominal share capital as
follows, namely:-
(i) For every 100,000
rupees of nominal share
capital or part of 100,000
rupees, after the first
100,000 rupees, up to
5,000,000 rupees, a fee of.......
500 1000
21. (ii) For every 100,000
rupees of nominal share
capital or part of 100,000
rupees, after the first
5,000,000 rupees, upto
5,000,000,000 a fee of........
250 500
(iii) For every 100,000
rupees of nominal share
capital or part of 100,000
rupees, after the first
5,000,000,000 rupees, upto
any amount a fee of........
100 200
Registration Fees for foreign companies:
Online submission
(Rs.)
Manual submission
(Rs.)
25,000 50,000
Registration Fees for Associations not for Profit under Section 42 :
Online submission
(Rs.)
Manual submission
(Rs.)
License or its renewal 5000 1000
Registration 25000 50000
Other Fees:
Online
submission
(Rs.)
Manual submission
(Rs.)
Filing fee per return 500 1000
Registration/ satisfaction of
mortgage/charge fee
5000 7500
Inspection fee of file of a
company
200 500
22. Application/Appeal/Complaint
fee:
ï· By a member
ï· By a creditor
ï· On behalf of company
500
500
500
500
1000
1000
Change of name fee 1000 2000
Alteration in Memorandum
fee
5000 10000
Extension in time period for
holding of
AGM
For private Cos. 5000
For Other Cos. 15000
For Other Cos. 15,000
For private Cos. 5,000
Certified copy fee
ï· Any certificate
ï· Memorandum and
Articles of Association
ï· Any return
Any other document.
For an application to the
Commission seeking approval
to issue, circulate and publish
the prospectus, a non-
refundable fee in the following
manner according to the
size of total issue including all
types of securities:
Up to Rs.250 million
More than Rs. 250 million
and up to Rs. 1000 million
More than Rs. 1000 million
---
(a) For providing list of
companies, a calculated at the
rate per data field subject to a
minimum fee of five hundred
rupees, a fee of
(b) For a Corporate
Registration and Compliance
100
For private Cos. 250
For Other Cos. 500
For private Cos. 100
For Other Cos. 200
Minimum 100
or 20 per page
---
---
---
Rs. 2 per data field
200
For private Cos. 500
For Other Cos. 1,000
For private Cos. 200
For Other Cos. 300
Minimum 100
or 20 per page
25000
50000
100000
Rs. 2 per data field
24. Registering a new company
Step 1: Approval of Company Name
This is the first step of company registration in Pakistan is choosing the companyâs
name. It is important to devise a unique company name that would set you apart
from the rest in the industry.
You must follow the restrictions and guidelines. For example, make sure that your
companyâs name does not include any prohibited words.
Step 2: Submission of Documents
Once the company name gets the approval, you need to submit the incorporation
documents to the Securities and Exchange Commission of Pakistan (SECP).
25. Step 3: Certificate of Incorporation
After submitting the documents, the SECP evaluates them. They check their
validity. A digital signature is granted by the National Institutional Facilitation
Technologies (NIFT) and can be acquired through the SECP.
Also, they issue the certificate of incorporation. Presentation of the company may
be needed. However, this depends on where the business started.
Step 4: Deposit of Shares
After the registration, shareholders must deposit their corresponding amount of
shares to the companyâs bank account.
Step 5: Registration of Income, Sales, and Professional Taxes
In conclusion, the last step of company registration in Pakistan is the registration
with the Federal Board of Revenue (FBR) and issuance of a national tax number
(NTN). A sales tax registration number may be registered if applicable.
Alternatives to company registration in Pakistan
Branch Office
A branch office is a suitable alternative to company registration if your company
wants to have a presence in Pakistan without setting up a separate legal entity.
Branches carrying out a contractin Pakistan can be established. However, a branch
office cannot take part in any commercial or trading activities of whatever nature.
Therefore, your activities depend on the contract you signed. The contractrestricts
your activities.
26. The parent company owns 100% of the branch office in the country of origin.
Since it is not a limited liability company, it does not require any minimum capital
either.
Process time for the registration takes up seven weeks. The permit can be valid for
1 to 5 years if it has an approval from the Board of Investment (BOI).
Liaison -Office
If you want to promote your products in Pakistan, you can set up a 100% foreign-
owned liaison office here.
Besides productpromotion, you can also provide technical advice and assistance,
explore the various possibilities of joint collaboration, and export promotion in
Pakistan.
However, this type cannot engage in commercial or trading activities and it is not
subject to any minimum capital either
A liaison office can only function according to the provisions of the contract or the
assignment.
While part of the contract states that you can only provide technical assistance and
productpromotion, you cannot engage in export promotion and other activities.
Hence, it is similar to the branch office. Therefore, there will be no shareholding
since itâs going to be in the country of origin only.
The standard time for establishing a liaison office in Pakistan is seven (7) weeks.
Therefore, once granted your permit will have a validity period of 1 to 5 years.
Also, the Board of Investment (BOI) needs to approve it.The Securities and
27. Exchange Commission of Pakistan (SECP), in continuation of its reforms to
provide ease of doing business, has combined the procedures of reserving the name
of a proposed companyand applying for its incorporation.
The major amendment in the procedure will enable speedycompany registration in
âfour working hoursâ through eServices. The SECP has already issued the SRO to
amend the incorporation procedures. These measures are in line with ease of
starting a business indicators mentioned by the World Bank Doing Business
Report.
The promoters of a company would only need to submit a combined application
that contains three options of name for proposedcompanyand incorporation
application with model memorandum of association and articles of association.
Earlier in the current fiscal year, SECP already merged the procedure to notify the
appointment of CEO in company incorporation.
In addition, the fee for incorporation of a company has been reduced significantly
due to merger of several statutory forms into a single form. The current name
reservation and company registration fee for a single member company with a paid
up capital upto Rs100,000 is Rs 1,550 under online mode and Rs 3,000 under
offline mode. Previously it was Rs 2,300 under online mode and Rs 4,500 under
offline mode.
These reforms have led to further reduction in the number of steps and time
required to start a company. SECP being a lead agency for business registration, is
cognizant of the importance of âEase of Doing Businessâ and will continue the
reform measures, which will lead to further robustcorporategrowth in the country
and formalization of the business sectorand documentation of economy
28. The role of the company secretary in Pakistan- current
perspectives
The Role of Company secretary is now more of a catalyst responsible for bringing
change in the process of corporate governance in company. Many responsibilities
such as
29. Adding value through key relationships
Another key task of a company secretary involves leveraging relationships with the
major players in the Board. In order to facilitate effective functioning of the Board
towards policy matters and oversight of management the key is to build these
relationships so as to understand and relate to the differing perspectives of
independent directors, executive directors and other sponsor directors.
Corporate Boards have an inherent dynamic towards poor communication, conflict
and inefficiency. The Board however, is not âone teamâ but is composed of
different groups with differing perspectives and priorities including independent
directors, executive directors, and other sponsor directors. It is this very make up
of the Board that a company secretary has to contend with. Since independent
directors provide advice and stern oversight, hence moving between these two
functions can easily lead to strained relationships.
Keeping in view the perspective of all groups forming the Board, a company
secretary has to build relationships with each member of the Board. The company
secretary, however, can help manage and overcome complex Board processes and
provide meaningful support to directors in a way that is necessary and effective.
Once - and only when - the company secretary has gained the Directors trust in his
or her competence, discretion and appreciation of potentially contentious issues a
Secretary can expand his or her role in the areas of administration and compliance.
Summarised below are some of the key relationships that a company secretary
manages
Building the relationship with the directorsï
Whilst knowledge of the governance processes and corporate law is a
company secretaryâs specialty they must communicate and assert that strong
30. customer relationships and smart strategy play an essential role and without
these there is no business to govern.
Relationship with independent directorsï
Company secretary can contribute his/her unique insight of what
independent directors should look for to ratify important decisions. The
CEO/Chairman also entrusts the Company secretary to explore issues with
independent director or other stakeholders in order to prepare an effective
discussion at the Board meeting.
Relationship with the independent Director and non-executive
directorsï
A Company secretary can help an independent director and other non-
executive directors understand business issues in a less formal context. It is
essential to make the independent directors aware of the management
perspective so as to engage them more constructively in an issue.
Relationship with independent directors and Chairmanï
Whilst a CEOâs perspective is dominated by their ambition for business, on
the other hand a Chairman, or other independent directors are much more
concerned with âoversightâ since this is their most critical role on the
Board. This oversight perspective is an innate feature of a company
secretaryâs role especially if they have a passion forâbest practiceâ
governance. However, most of the independent directors have other full-time
occupations, directorships and/or other commitments that demand their time
and attention. In view of this, a starting point should be the awareness that
independent directorsâhave to be brought into the issueâ. Any
presentation, conversation, or e- mail must start with a big-picture
introduction in order to get the discussion going.
31. Building relationships with the Board of directors âConclusion ï
Building relationships with people who are used to being in charge (as most
Directors are) requires a fineï balance of empathy and assertiveness. While
this can be considered an art that cannot be acquired over night, however,
this can be a skill which can be learnt and perfected by intentionally building
the relationship repertoire, reflecting on what works well as well as
mentoring and coaching.ï
The very nature of roles played by a company secretary presents some key
challenges, including working simultaneously with the Board and
management. Rising to these challenges a company secretary must have
strength of character to be able to report to both the Board (via its Chairman)
and the company itself (via its CEO).
No doubt the effectiveness of the company secretaryâs role will depend on the
nature of their working relationship with the Chairman and a company secretary
should be accountable to the Board through the Chairman on all governance
matters.