11 Oct The Misconception | What are the Responsibilities of the Board and the Company Secretary?
EIMF has recently welcomed another expert trainer to their team Mary-Olive Mccluskey, who recently shared important know-how with our Directors, Corporate Administrations, Secretaries and other industry professionals; we look forward the next presentation shortly. In the meantime, we share with you one of her recent articles.
The Company Secretary in Cyprus
Much of the corporate world in Cyprus believe that the role and duties of the Company Secretary are restrictive and administrative in nature. It has been a business practice for private companies to either, engage the services of external Company Secretaries at a retainer fee (to maintain the Company’s minutes, the statutory records, to file the Annual Return Form HE 32 (I) and certain other Forms with the Registrar of Companies), or for a member of the Board of Directors (often a family member in small family owned Companies) to be appointed to the position of the Company Secretary, without understanding the legal and practical effect of such appointment.
Following the financial crisis and the recent financial scandals, both worldwide and in Cyprus, this trend is changing; separation of roles is increasingly being adopted, and Company Secretaries should keep themselves informed of the many different aspects of the law, keep up to date with the relevant legal, statutory and regulatory requirements and be able to give support to the Board of Directors. The Corporate Governance Code issued by the Council of the Cyprus Stock Exchange, serves as a guidance and best practice sample for Companies, to be able to focus on Board effectiveness and how the Company Secretary can assist them in this respect.
Failure to perform the duties entrusted to the Secretary under the various Laws and under the Companies Law, Cap. 113 will be against the interests of the Company and will expose the Company Secretary to penalties, imprisonment and administrative fines. In addition to the statutory liabilities, a Company Secretary may also have liabilities arising from the contract of service with the Company. As long as the Company Secretary acts within the scope of authority, bona fide and takes reasonable care in the discharge of duties, personal liability will probably not incur. The Company Secretary may be held personally liable for the loss of the Company resulting from willful negligence, or misconduct or fraud committed within the course of their appointment.
Company Secretaries must employ professional management and ensure control techniques are in place to ensure that compliance obligations are not overlooked and that a schedule is properly planned. The Company Secretary should be familiar with the type of the Company it serves, its Memorandum & Articles of Association, the basic provisions of the Companies Law, Cap. 113, the Code of Corporate Governance, the role, duties and responsibilities of the Board of Directors, the liabilities exposed under the laws of the specific area the Company operates, and the terms of the Directors & Officers Insurance Policy. Special and expert professional advice should be sought when the Secretary is in doubt.
Learn more about the responsibilities of the board and company secretary
Article by Mary – Olive McCluskey, Advocate
MCCLUSKEY, MARKIDOU LLC Advocates
THE VIEWS AND OPINIONS EXPRESSED HEREIN ARE THOSE TO THE TRUE AND BEST KNOWLEDGE OF THE AUTHOR AND ARE NOT TO BE RELIED AS THE BASIS FOR ANY DECISION. EACH CASE IS DIFFERENT, AND CONSULTATION MUST BE MADE APPLICABLE EACH TIME AND IN ACCORDANCE WITH THE LAWS AND REGULATIONS IN FORCE AT THAT TIME.