08 August 2016 by Conor Ryan
While much is written about the value company secretaries offer to board and management, there is less awareness of the multiple ways in which they can specifically support the work of financial directors and auditors. In fact, the stronger the link between the financial director and the company secretary, the more streamlined the auditing process and year end will be. As such, a close and effective working relationship between the two is something every company should strive to cultivate in the interest of enhancing company performance and optimising governance and compliance practices.
In recent years an increased emphasis has been placed on transparency, especially with regard to financial statements. While the finance director’s perspective will naturally be from a transaction basis, the company secretary’s key objective is to ensure that transparency is maintained throughout preparation of the statements and the annual returns, and that there is a full and accurate audit trail comprising all transactions.
One very important aspect of the role of a company secretary is maintaining the company’s minute books and recording of business transactions including granting loans to subsidiaries, acquisitions and the payment of dividends to shareholders. Before any such transactions can be implemented, approval must be sought from the directors, usually at a directors’ meeting or via written resolution. In this regard, the company secretary will often act as a crucial interface between the finance/tax departments and the board. In addition the company secretary will record all approvals granted by the directors in the minutes. When the accounts are being reviewed at year end, evidence must be furnished to prove that any transactions appearing within the financial statements were formally approved, and properly kept minute books are fundamental to this.
When the annual accounts are being prepared, company secretaries will liaise closely with the finance department to ensure all statutory information contained within the accounts is correct. They will also be responsible for co-signing the annual returns with a company director, certifying the attached financial statements, and ensuring Compliance Statements made by the directors are included. As all accounts must be filed with the Registrar of Companies by prescribed deadlines as set out in the Companies Act 2014 and the relevant tax acts, the company secretary will work to see that those deadlines are rigorously adhered to.
As the importance of establishing a strong culture of corporate governance and compliance grows, underpinned by a new Companies Act which imposes greater liability on directors as well as stricter penalties, the value offered by the company secretary at all levels of the company grows too. An expert source of advice and assistance regarding all governance and compliance requirements, company secretaries also bring to the table a vibrant network of connections between different parts of a company, from shareholders to boards to management to all the various departments. This gives them the ability to actively work towards both greater cohesion and greater transparency- cornerstones for any companies moving forward and for any financial directors moving towards year end, annual returns and audits.