What is the Secretary of the Board for?

A Secretary of the Board must interpret from a legal perspective, the debates and decisions that the Board values and wishes to adopt. And he must ensure that its members live together peacefully.

Thus, what is the Secretary of the Board for?

Ten reasons why the position of the Secretary of the Board is useful:

Chairman or Secretary: But at least one

1.- “Either Chairman of the Board or Secretary of the Board”. No certification of a Board or Council agreement can be issued without the concurrence of the two persons. You either control the Presidency or the Secretariat. By having control of one of those positions you know that no Board or Council agreement is beyond your knowledge. The Secretary assists the Chairman so that the Directors receives the relevant information for the exercise of their function. The Chairman decides what information is provided. The Secretary advise him on the adequacy of the information required and provides it when necessary, coordinating such work with the Company’s executives and managers.

2.- Due to the same reasons already explained, any attachment or pledge, encumbrance or lien that weighs on the shares/holdings of the Company, must be “reasoned” by the Secretary of the Board. For many management companies or entities, this is a key factor when it comes the time to put the investment up for sale. They must know the status of the shares or holdings that are going to be sold in tow to the investing entity.

3.- Any sale of shares/holdings of the Company requires the reasoning by the Secretary. He, thus, constitutes a dissuasive barrier so that these operations take place without the consent of the reference partners.

Contacto No te quedes con la duda, contacta con nosotros. Estaremos encantados de atenderte y ofrecerte soluciones.

Meetings

4.- The ability to call meetings or to convene the Council without any restriction. Discrepancies often occur when calling the meetings, as well as on the agenda and date of the event. The Secretary and or the Chairman are legally and statutorily empowered to do so. The Secretary of the Board of Directors must facilitate the smooth running of Board meetings.

5.- In order to keep the social documentation under control. A good Secretary must keep the documentation and facilitate access to that documentation which, in addition to being available, must be presumed to be well organized and guarded.

6.- The interpretation of hundreds of agreements contained in the Bible of a transaction. What implications would it have if…? Access to and immediate interpretation of those extensive agreements is a matter for the Secretary. The performance of this task, in addition to being very frequent, become essential for the life of the Company in which it has a share.

Si te ha interesado este artículo no dudes en leer:

A Practical Guide to Directors Liability

The company’s director will be held responsible of the company's debts to the company’s owners and to its creditors. He must therefore respond with his personal assets for the company's debts.

The importance of what appears in the Minutes

7.- The drafting of Minutes (of Council or Board) is essential to the interests of a Company. And it is (or can be) full of legal nuances, and these nuances can be perfectly evidence in a legal process. Or on the contrary they can prove that it exists, or not. Or they can affect at the price of a transaction. Or it may even be evidence that an impeding insolvency situation already existed at a certain meeting. Therefore, the Secretary must attest to its resolutions. He must record the proceedings of the meeting in the Minutes book.

Legal point of view

8.- The Secretary must ensure the formal and material legality of the Board’s actions. And, ensuring that its proceedings and rules of governance are respected and regularly reviewed. The Secretary, present at the debates of the Board of Directors, must not only react when asked. Thus, the Secretary of the Board must intervene in the Council or in the Board. He must do it when any question arises that has a legal derivative of which the Directors may be unaware of, and must explain its scope. This specific legal support, of reporting hidden, ignored threats, becomes essential for the figure of the Board of Directors. And twenty-five years later, I still do not know of a Council or Board in which an issue with a legal derivative is not discussed.

What should not appear in the Minutes.

9.- By action or omission, the Secretary of the Board has the capacity and must provide guidance to the members on matters that are NOT recommended for its inclusion in the Minute.

Social Peace

10.- The Secretary must ensure “social peace”. And, -because of his experience- he has as another of his obligations, that of interlocution and mediation between the different kind of shareholders of the Company. He must, therefore, do everything in his power to ensure that social peace prevails. He must detect discrepancies and dysfunctions and he must warn of them and anticipate solutions.

Thus, the Secretary of the Board is much more useful than many people think.

Conclusions:

The Secretary of the Board must facilitate the smooth running of the Board meetings, taking particular care to provide the Directors with the necessary advice and information, to keep the documentation, to record in the minutes books the progress of the meetings, and to attest to the resolutions of the Board. It must also ensure the formal and material legality of the Board’s actions and guarantee that its procedures and rules of governance are respected and regularly reviewed.

If you liked this article, you may also find the following interesting:

Company Dissolution: Directors’ Duties and Liabilities