The Growing Role of the Company Secretary in the Public and Third Sectors
Since 2008, there has been no legal requirement for a non-listed company to have a company secretary. However, the data in recent years clearly demonstrates there has been a boom in the number of company secretaries outside the listed environment, particularly in the not-for-profit and public sectors.
A robust governance structure and framework, which really ensures transparency and compliance with the ongoing changes in regulations, is imperative. This has enabled the creation and development of a company secretary role which is far from purely administrative, but increasingly strategic, advisory and, most importantly, tasked with building trust and providing direction to the organisation. As new legislation develops and regulations are reassessed and evolve with greater complexity, governance in the public sector is being particularly scrutinised. In the last 20 years, the government has funded millions into public services. Notable examples include the creation of NHS Foundation Trusts, multi-academy trusts, and the increased funding to housing associations, with the aim of improving healthcare, education and housing. These are just a few examples of sectors which form the foundation of a healthy, well-functioning society. The public sector, partially due to the pandemic, has been subject to backlash and a loss of confidence by the general public. The NHS has been described as ‘buckling’ by The Guardian, with ‘no clear government plan to rescue it’. Similarly, there is a housing shortage crisis in the UK, with 8.5 million people with an unmet housing need. Charities have also been accused of misuse of funding and donations, with case studies of fraud in charities posted by The Charity Commission.
As the public and third sectors continue to battle disparaging headlines and underfunding, effective governance becomes an absolute must. It is imperative these organisations are run in a way which is sustainable and responsible, as well as compliant with the regulations. Many of these organisations are run under the scrutiny of regulators such as the Financial Conduct Authority (FCA), The Care Quality Commission (CQC), the Charity Commission and Office for Students (OfS), leaving no room for error when it comes to compliance and accountability. Many also undergo complex processes such as mergers which require additional meetings with efficient minuting, liaising with stakeholders and a thorough legal knowledge. Good governance can allow for a trickle-down effect, where everyone throughout the organisation, and everyone it serves, can benefit. One of the first places to start is to focus on the governance frameworks and structures in place, notably the board composition and board objectives. Governance frameworks should be implemented with thought and longevity, and the board should comprise directors with skills that reflect the needs of the organisation and society at large.
A company secretary can quickly add value by reviewing the governance processes and implementing new ones to ensure the organisation functions efficiently, sustainably and in line with regulations. In the past, this role was sometimes undertaken by volunteers, who may, for example, have taken minutes for essential meetings in their evenings or free time. However, the role has evolved into a full-time, heavily strategic position. The title of company secretary is now increasingly replaced with variations such as ‘Head of Governance’, ‘Governance Director’ or ‘Head of Corporate Affairs’ to highlight the breadth and importance of the role. The role of a company secretary can often be broader in the public and third sectors than in the corporate sector, as these sectors are subject to several different regulators, and has been described as a role where ‘you have your fingers in many pies’.
Company secretaries in all sectors have a bright future. As robust governance is no longer purely an ‘add-on’ to a business, it is imperative it forms part of the essential business strategy; when governance functions well transparency and accountability can be ensured.
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