Our experience in working with Boards and Executives in corporates gives us great insight into changes and trends in talent and the requirements of clients in senior leadership roles. There has been a significant evolution in what Boards are looking for in a Company Secretary and some strong trends in what key attributes are most in demand. We have seen a shift in the approach to the Company Secretary role and, in some cases, the professional make up.
The Company Secretary is now expected to fulfil a much broader brief, more than just the formal duties that historically defined the role as an officer of the company, acting as a governance
Governance, Scrutiny and Regulation
In the increasingly regulated world in which we operate, there is greater scrutiny, governance and regulatory pressure on Boards. We have seen significant client-led demand for the ‘modern’ Company Secretary. The role has evolved to meet the greater needs of corporates. In the last three years, our clients appointing a new Company Secretary, have consistently looked for a significant step change.
What is the Chairman looking for?
Chairmen and CEOs are increasingly demanding a greater breadth of skills and commercial acumen:
- A proactive, horizon spotter, someone who will head to the issues
- A commercial, business focused individual
- A strategic outlook and gravitas in the Boardroom
- Proactive relationship-builder, with the Board
- Effective manager of challenging messages
- Good emotional intelligence and soft skills
A General Counsel and a separate Company Secretary, or, combined?
In 48 of the FTSE 100, the GC and Company Secretary roles are combined, across a range of sectors from 3i and Aviva to Vodafone and Whitbread. This is a fluctuating statistic, however, with some large PLCs which previously combined the roles i.e. BT, and will split the roles again in April 2018. While specific circumstances at any particular organisation can lead to change, the balance has been roughly equal for a number of years.
Where there has been a steady change, is in the professional background of those in the role of the Company Secretary. Currently, almost two thirds (65), of FTSE 100 Company Secretaries are lawyers (either in a combined or stand-alone role). In 21 of UK blue chips, lawyers are doing a stand-alone Company Secretary role, for example, Lloyds Banking Group and Rio Tinto, and 27 are (non-lawyer) Chartered Secretaries, i.e. HSBC.
There has been a shift in the last twelve years, in 2006, 52 of the FTSE 100 Company Secretaries were lawyers, with 33 of those in a combined GC and CoSec role. 38 of FTSE 100 CoSec roles were
fulfilled by specialist Chartered Secretaries, with the remainder either fulfilled by individuals with a different professional background or the function was outsourced.
Appointing a senior lawyer as Company Secretary enables the company to have a more diverse succession plan for the Group General Counsel. The individual will gain broader experience in the
plc versus a divisional or regional GC role, which is beneficial from a development perspective. They will get exposure to the Board and issues that are key in the successful running of the business.
However, the evolution of the role, with lawyers being appointed as Company Secretaries is not the only solution and there are many high profile Chartered Secretaries in major corporates, such as
HSBC and Tesco. There are also other professional backgrounds, such as finance or investor relations and some companies have outsourced the function, principally because they do not have significant business in the UK, other than the listed entity.
Over the last three years, our clients in the FTSE350 have been very focused on what they are looking for in a Company Secretary (and Deputy), they have consistently looked for a range of attributes which include proactivity, commercial acumen, breadth, gravitas and credibility in the Boardroom and leadership. These all contribute to what the modern Company Secretary looks like in major listed companies in the UK.
Certainly, the lawyers are here to stay, a combination of client demand and individuals stepping up to the mark has led to a diverse professional profile of Company Secretaries in listed businesses.
Julian is a Partner at Stonehaven and leads the General Counsel and Governance Practice. He has considerable experience in hiring senior governance professionals such as Company Secretaries, General Counsel, and leaders in Risk and Compliance.
Partner, Stonehaven International