SECTION 4.

11:THE COMPANY SECRETARY

Roles and qualifications
Appointment and removal
Duties
Status
Liability
Authority

THE COMPANY SECRETARY

A company secretary or Corporate Secretary is a company officer in a private or public sector company,
normally in the form of a managerial position or above. The secretary plays an important role as
professional advisor to the Board of directors.
Section 169 (2) of the Companies Act, Chapter 24:03, provides that,” Every company shall have at least
one secretary ordinarily resident in Zimbabwe.” Evidence of such appointment is shown in form CR14
lodged with the Registrar of Companies either at initial incorporation of the company or at subsequent
appointment of the company secretary. The secretary is recorded in the Register of Directors and
Secretaries as compelled by Section 187(1) of the Companies Act.
The interpretation of secretary under Section 2 of the same Act is that, “secretary includes any official of
a company, by whatever name called, who is performing the duties normally performed by a secretary of
a company.” According to ACCA Study module, “The post of company secretary may be held by another
company or by joint secretaries; any formal act of a secretary may in their absence be performed by a
deputy or assistant”.

QUALIFICATIONS
Company secretary must be a natural person and a resident in Zimbabwe and is a member of any one of
the prescribed professional bodies, For example, the Institute of chartered secretaries and administrators
in Zimbabwe. Public accountants, chartered accountants, chartered secretaries or legal practitioners are
sufficiently qualified to be company secretaries.
It is vital that the company secretary must have sufficient educational/ training qualification and detailed
working knowledge for the reason that he/she is charged with the responsibility for ensuring that the
company’s affairs are carried out and administered in accordance with the principles of good corporate
governance. Further, the person must not be bankrupt and has not been convicted of any offence.
The secretary is not only limited to a natural person, but also any other entity with legal contractual
capacity like a body corporate or a partnership can be appointed to take up the position of company
secretary. In the case of a secretary being a body corporate, it must be duly registered and its name and
the situation of the registered office must be stated. The Board is therefore required to evaluate and
choose the most capable person to be their company secretary.
In a private limited company the secretary needs no formal qualification. The directors just have to make
sure that the secretary has the appropriate knowledge as a company secretary. In the case of a public
limited company, the secretary needs to be professionally qualified as a lawyer, accountant or company
secretary. He or she should be a member of a professional body approved by ministry. He or she must not
be bankrupt or convicted of an offense. Besides these qualifications he or she must have the general
knowledge of the industry and trade so that he can make useful suggestions to the directors. He must also
have a good personality as he is supposed to cooperate with the staff all the time.

ROLES
According to Kneale in Chitiki (2007), the company secretary is responsible for advising the Board of
directors in order to comply with all relevant legislations and regulations and to ensure that the company
and its directors operate within the laws. The company secretary is required to assist the board members
at all times to understand their legal responsibilities to properly carry out the duties as directors.
A company secretary is considered to be oil in the corporate engine, short of which there will be
catastrophic meltdown at the heart of operations. Generally the secretary’s roles come as an acme of the
requirements and procedures as may be contained in the company’s Memorandum and Articles of
Association in conjunction with the provisions of Companies Act and related subsidiary legislation.
In practice the secretary plays a central role in the administration and governance of an organization’s
affairs. The role of the Company Secretary concerns three main areas namely the Board, the Company
and the Shareholder. Within each, the Company Secretary’s role can be very diverse and these are
elaborated in the following detail.

Shareholders:
The company secretary is the primary point of contact for institutional and other shareholders, especially
with regard to matters of Corporate Governance. The Company Secretary needs to communicate with the
shareholders as appropriate and to ensure that due regard is paid to their interests. The secretary is the
third point in the administrative triangle among directors and shareholders. The secretary is the one who
is responsible for the maintenance and management of the shareholder records such as the register of
members and their shareholding levels. He/she organizes shareholder related events for example
organizing general meetings, paying dividends and the issue of annual report and accounts.

Board of directors:
The secretary’s essentially broad responsibility to the board is to provide comprehensive practical support
and guidance to directors both as individuals and as a collective group with particular emphasis on
supporting the non-executive directors. Besides this, secretaries are expected to avail advisory support to
the chairman and other directors in an effort to ensure that statutory and all relevant regulatory
requirements are met for the conduct and running of board meetings. The secretary makes sure that the
board has proper access to the information it requires. He/she facilitates the acquisition of information by
all board and committee members so that they can maximize their ability to contribute to board meetings.
The secretary assists in the compilation of board papers and to filter them to ensure compliance with the
required standards of good governance. The Secretary also assists in raising pertinent matters which may
warrant the attention of the board and due regard is paid to the specific business interests of the company.
In addition secretaries must ensure that the procedure for the appointment of directors is properly carried
out and the proper induction of directors, including assessing the specific training needs of directors or
executive management.
The company:
The Companies Act imposes numerous statutory requirements, the Memorandum and Articles of
Association also prescribe specific and implied regulatory requirements and procedures as guidelines to
the proper conduct of the company’s affairs. Most of these requirements are backed up by criminal
sanctions so that, in the event of a breach, the company and every officer of it who is in default is liable to
a fine and, in some cases, imprisonment for example Section 187(6). The secretary assists in the
implementation of corporate strategies by ensuring that the board’s decisions and instructions are properly
carried out and communicated accordingly. They should be available to provide a central source of
guidance and advice within the company on matters of business ethics and good governance. Failure to
adhere to statutory requirements results in the company being liable to penalties most of which are costly
to the company. Based on powers bestowed upon him/her as an officer of the company the secretary has
got extensive duties and is presumed to possess the power to bind the company in contracts connected
with the administrative side of the company’s affairs.

Appointment and removal

Subject to the provisions of Table A, Section 111 of the First schedule of the Companies Act, “the
secretary shall be appointed by the board for such term, at such remuneration and on such conditions as it
may deem fit; and any secretary so appointed may be removed by them.” Therefore, unless otherwise
stated in the Articles of Association, the secretary may be removed by a resolution of a board and may
also resign on his own accord. Upon appointment to position of Secretary and on removal from office
Form CR 14 is completed and lodged with the Registrar of Companies.
http://www.montegodata.co.uk/company/secretary.htm further provides that a company secretary who is
removed from office may require the company , in its annual financial statements relating to that financial
year, to include a statement not exceeding a reasonable length , setting out the secretary`s contention as to
the circumstances that resulted in the removal.
It is the duty of directors to appoint competent secretaries. According to the King 11 Report in Chitiki
(2007),“ the appointment of the company secretaries is a matter reserved for the board as a whole in order
to promote the secretary’s independence. Should the directors not adequately apply their minds, when
determining that in their opinion the knowledge of the appointee is adequate, they could be held liable for
any subsequent damages caused by the inadequate knowledge or experience of the company secretary.”
When the position of company secretary falls vacant, it is known as casual vacancy. If the Secretary is
incapable of carrying out his/her duties, the assistant or deputy secretary shall carry out the functions of
the Secretary and the document is deemed to be executed by the company. The directors may decide on
acting appointments for a period not exceeding 6 months. Any periods of six months or longer must be
recorded in the register and notified to the registrar using a form CR 14. If the company is listed, the
appointment or resignation of the company secretary should be published.
Failure to fill a casual vacancy, following resignation or removal of company secretary will result in the
directors, who knowingly failed to comply, being liable to punishment since the casual vacancy actually
means that the company is no longer in compliance with Section 169 (2) of the Companies Act. Where a
secretary has left office by way of death, notification of the death must not be held until a successor is
appointed. Form CR 14 must be lodged with the registrar one month after the date on which the company
is notified of such an occurrence.
DUTIES
The company secretary’s duties are not unvarying across the entire range of entities. In practice the duties
of the secretary depend on the style and size of the organization and the variations may exist depending
on the provisions of Memorandum and Articles of Association of the particular entities. The following
include both those duties which are legally obligatory as well as those which result from best practice.
He/she may also need to pay particular attention to Corporate Social Responsibility and other pertinent
subsidiary legislation, e.g. on environment, health and safety and so on. The duties given below are not
exhaustive as the Company Secretary may have to use his/her initiative to ensure that all core duties are
fulfilled.
1. General Compliance Monitoring and laying in place procedures which allow for compliance with
relevant regulatory and legal requirements, particularly under the Companies Act including legal
requirements on retention of documents; retaining the minimum set of records required for commercial
reasons, ensuring that procedures are in place to allow adequate historical archive to be maintained. The
secretary facilitates compliance with the company’s Memorandum and Articles of Association and
participates in the drafting and incorporating of amendments in accordance with correct procedures.

2. Responsibility for share registrar functions within the company with a view of monitoring share
dealings, to reduce the risk of insider trading and hostile take-overs.

3. Maintaining the company’s register of members, dealing with transfers and other matters affecting
share-holdings, dealing with queries and requests from shareholders. Furthermore, he/she is responsible
for implementing directors’ and employees’ participation schemes as well as the maintenance of the
following statutory registers:-
a) Register of members. [S.115]
b) Register of directors and secretaries [S.187]
c) Register of debenture holders [S.107]
d) Register of Directors’ shareholdings [S.182]

4. Where the company is listed on ZSE, the secretary should monitor and ensure
compliance with the ZSE listing requirements, the implementation of the model code and/or the company
code for dealing in the company’s securities, as appropriate. The secretary manages relations with the
Stock Exchange through the company’s brokers, releasing information to the market, ensuring the
security of unreleased price-sensitive information, as well as making applications for listing of additional
issues of securities.

5. Executing the instructions of the board of directors and ensuring the resolutions of the meetings are
implemented.
6. The secretary is responsible for ensuring that procedures are in place for the correct administration of
subsidiary companies and that correct information is given to the holding company, maintaining a record
of the group’s structure.

7. Co-coordinating the publication and distribution of the company’s annual report and
accounts and interim statements, in consultation with the company’s internal and external advisers, in
particular, when preparing the directors’ report. Along with this, the company secretary in conjunction
with directors is compelled to ensure that annual financial statements are true/correct and up to date.

8. Ensure proper filing of all statutory and necessary forms and returns with Registrar of Companies.
Filing information with the Registrar of Companies is done to report certain changes regarding the
company or to comply with requirements for periodic filing. Of particular importance in this regard are:
a) Annual returns
b) Annual report and accounts
c) Amended Memorandum and Articles of Association and the relevant forms.[CR11]
d) Notices of appointments, removals, resignations and deaths of directors and secretaries. [CR14]
e) Changes to the issued or authorized share capital [CR 5]
f) returns of allotments [CR 2]
g) notices of removal or resignation of the auditors
h) change of registered office
i) Resolutions in accordance with The Companies Act.

9. Participating as a key member of the company team established to implement corporate

acquisitions, disposals and mergers, protecting the company’s interests by ensuring the effectiveness of
all documentation, ensuring that due diligence disclosures enable proper commercial evaluation prior to
completion of a transaction thereby ensuring that the correct authority is in place to allow timely
execution of documentation.

10. Continually reviewing developments in corporate governance, facilitating the proper induction of
directors into their role, advising and assisting the directors with respect to their duties and
responsibilities, in particular compliance with company law and, if applicable, Stock Exchange
requirements, counseling them when preparing presentations and memoranda.

11. Registered office: Establishing and administering the registered office, attending to the receipt, co-
ordination and distribution of official correspondence received by the company, sent to its registered
office ensuring the provision of facilities for the public inspection of company documents.
12. Company identity. Ensuring that all business letters, notices and other official publications of the
company show the name of the company and any other information as required by the statutes and that
company name plates are displayed in a conspicuous place.

13. Effective preparation, coordination and administration of meetings. He/she is responsible for
circulating the notices together with the agendas. The secretary has to be present at all company meetings
and those of the board. The Company Secretary can authenticate documents or proceedings such as
meetings of the company and the signature of the Secretary on a written resolution is evidence of the
proceedings. The approach differs with the type of meetings, and the following is availed detail for
consideration.

Board Meetings:
Facilitating the smooth operation of the company’s formal decision making and reporting machinery,
organizing board and board committees meetings (e.g. audit, remuneration, nomination committees etc.),
formulating meeting agendas with the chairman and/or the chief executive and advising management on
content and organization of memoranda or presentations for the meeting, collecting, organizing and
distributing such information, documents or other papers required for the meeting, ensuring that all
meetings are recorded and that the minute books are maintained with certified copies of the minutes and
that all board committees are properly constituted and provided with clear terms of reference.

General Meetings
Ensuring that an annual general meeting is held in accordance with the requirements of the Companies
Act and the company’ Articles of Association obtaining internal and external agreement to all
documentation for circulation to shareholders. The secretary is involved in preparing and issuing notices
of meetings, and distributing proxy forms to prepare directors for any shareholder questions and helping
them create briefing materials, at the same time overseeing the preparations for security arrangements at
meetings. The secretary ensures that proxy forms are correctly processed and that the voting is carried out
accurately, coordinating the administration and recording of minutes in meetings.

14. Shareholder communication .The secretary acts as an information channel that ensures provision of
appropriate information to the shareholders, (e.g. through circulars), arranging payment of dividends and
interest, issuing documentation regarding rights issues and capitalization issues. In addition, he/she
maintains good general shareholder relations, maintaining good relations with institutional shareholders
and their investment committees.

15. Ensures safe custody and proper use of the company seal, if one exists.
The professional background, previous work experience and general personal capabilities of the Company
Secretary will generally dictate the nature and scope of additional responsibilities in areas such as
accounting, property, pensions and insurance management, though they cannot be considered to be core
duties. These duties will frequently take up a substantial proportion of the Company Secretary’s time and
their importance should not be underestimated. For example, a lawyer is more likely to specialize in
litigation and an accountant is more likely to manage a treasury function. A Chartered Secretary, being
specifically trained for the role, is more likely to take-on additional responsibilities such as property
management, pensions and insurance matters. However, these are merely examples and, in practice, there
are very few areas which are the exclusive preserve of any category of professional.

Status
The company secretary is a powerful officer of influence in the company who is at the center of the
decision making process. He/she is an integral midfield player who guides the directors in their pursuit of
profit and growth. He is perceived to act with integrity and independence in order to protect the interests
of the company, its shareholders and its employees. However, the secretary is an officer and often is also
an employee of the company. A company secretary maybe a director, but is not automatically a director,
and if not a director they will not be a member of the board. However, the secretary is an officer and is
often an employee of the company. The statutory register of directors must also include the secretary’s
particulars this is in terms of Section 187(1). (Register of directors and secretaries: Every company shall
keep at the office at which the register of members of the company is kept a register of its directors and
secretaries).The first appointment of the secretary and any subsequent change must be notified to the
Registrar of Companies.
He/she must be independent and must be able to give impartial advice and support to the directors both
individually and as a group. He/she is in the position of confidence as the trusted advisor of the Board.

Liability of the company secretary

The company secretary is an officer of the company who has fiduciary duties to perform for the
company. According to section 130(2), if a meeting has been adjourned not less than four days after the
adjournment the secretary should publish in the news paper the following information: time and place to
which the meeting was adjourned, the matter before the meeting at the time it was adjourned and the
ground for adjournment. According to section 130(3) if a secretary fails to comply with requirements in
subsection two he or she shall be guilty of an offense and liable to a fine not exceeding one hundred
dollars this is
A company secretary is personally liable to criminal charges if he commits wrongful acts and can also be
penalized with a fine as illustrated in the case of
Penrose v Martyr [1858] where company secretary accepted a bill of exchange drawn on the company on
which the name was incorrectly written. Held: the company secretary was personally liable to the bill.
Company secretary shall be guilty of an offence and liable to a fine not exceeding one hundred dollars if
he or she fails to give notice of board meetings this is according to section 125 (7).
It is the duty of secretary to record minutes of all proceedings of general meetings failure to do so he or
she shall be guilty of an offence and liable to a fine not exceeding two hundred dollars according to
section 138(4).
According to section 139 (3) if company secretary refuses to allow inspection of minutes by members he
or she shall be guilty of an offence and liable in respect of each offence to a fine not exceeding four
dollars and further to a default fine.
If a secretary fails to keep a register showing respects of each director of the company number, the
description and amount of any shares he or she shall be guilty to an offense and liable to a fine not
exceeding one thousand dollars. [Section 182(8)]
The company secretary may also be liable in case of the following ;
 If he or she fails to maintain a register of directors, shareholders and debenture holders [section 115(7)]
 If he fails in making ready share certificates and debenture certificates within the stipulated periods.

Authority of the company secretary

The secretary has got apparent or seeming authority to act as an agent of the company. This is known as
ostensible authority. The company is legally bound by contracts and documents authenticated by
secretary on its behalf provided he/she acted within authority and powers. The company secretary carries
out all their duties and may also take a greater role in the day-to-day administration of the organization. A
document which purports to be signed by the Secretary shall be deemed to have been duly executed.
In Panorama Developments (Guildford) Ltd. v Fidelis Furnishings Fabrics (1971) the company
secretary of Fidelis hired a car from Panorama. He signed the hire documents in own name and added
‘Company Secretary’. Panorama believed he was hiring the motor car for Fidelis clients. In fact, he used
that car his personal use. When Panorama presented the bill to Fidelis they refused to pay, claiming that
the secretary was acting contrary to the powers.
The Court of Appeal ruled that a third party could assume that the Company Secretary had authority to
bind the company in contracts of an administrative nature and the court described the status of the
company secretary as follows: “He is an officer of the company with extensive duties and responsibilities.
He is no longer a mere clerk. He regularly makes representations on behalf of the company and enters
into contracts on its behalf which come within day-to-day running of the company’s business. So much so
that he may he may be regarded as having the authority to do such things on behalf of the company, he is
certainly entitled to sign contracts concerned with the administrative side of a company’s affairs such as
employing staff and ordering cars and so forth”. This goes as far as showing that all such matters now
come within the ostensible authority of a company`s secretary.

CONCLUSION
The Secretary often acts as an information and reference point for the Chair and other committee
members clarifying past practice and decisions and confirming legal requirements that promote good
corporate governance.
Companies Act (24:03) of 2008, Harare: Zimprinters
REFERENCE \ LIST
Nkala J C, (1995),Company Law in Zimbabwe,ZDECO:Harare
www.google.com\\liabilityofacompanysecretary.
Chadwick,Nanette,Zimbabwe company law/ Cilliers,H.S,Company Law-3 rd-Durban,Butterworths,1977
CKneale, C.D. Corporate Secretaryship in Zimbabwe, ICSA Study Pack Corporate and Business Law,
ACCA Study Text. hristie,R.H,Practical Commercial law in Zimbabwe,Harare:Collins1992 Gibson,J.T.
(1977), Commercial law, Pretoria: South African mercantile and company. Mavhunga, M. (2003)
Corporate Law and business adminstration, Harare: Trust Academy.
www.businessdictionary.com (accessed on 18/08/2014)