Insight Local Government Lawyer Insight February 2018 15 that can lull the unsuspecting to believe that company law procedures are simply a matter of ticking the right boxes. Companies House does not check or reject online company submissions on their compliance with the CA as this is the responsibility of the directors. A dedicated company secretary will want to ensure that the statutory procedures, underlying the online responses, have been complied with before ticking any of the boxes. But what do they do? As already alluded to, the CoSec role in the context of local authorities is still in its formative years although its importance and need is certainly growing. At times, the CoSec role has been misunderstood as a ‘glorified’ secretary or a position for a junior lawyer to undertake. However, I would suggest that if it includes the function of a legal advisor to the board then it is, at least, equivalent to the strategic role of a head of legal or the monitoring officer of the authority. If the role is extended to acting as a legal advisor, as in the case of the NHS, then the company can benefit from an experienced lawyer with the ability to apply diverse areas of law to a hybrid of public and private law business requirements. There are no prescribed duties of a Company Secretary. It depends on the circumstances of the company and the requirements of the role as determined. For example, a plc will usually have both a CoSec to support the board and in-house counsel, whereas in the NHS there is a dual role for the CoSec that includes also acting as the legal advisor. Most local authority-controlled companies, dependent on their size and resources, should have a dual role for the CoSec to include acting as the board’s legal advisor. This would be a cost-effective solution and add value to the business of the company and the local authority in question. The typical list of company secretarial duties can be readily found on numerous company law websites, so I have not duplicated these here. However, I would broadly categorise the CoSec duties as falling into; administration, statutory and regulatory compliance, legal advice, communication with internal and external stakeholders, corporate governance and attending to Companies Act requirements. Whilst directors occupy highly visible leadership and decision-making roles in the company, the CoSec role provides the underlying support and conduit that links the company with the local authority as the sole shareholder or other shareholders as the case maybe. The role requires forethought, planning and due diligence for the preparation of Board meetings and to facilitate the implementation of Board decisions. It is all about making things happen behind the scenes; they are as the civil servant is to the ministers or the court clerk is to the magistrates. In some local authorities, it seems to be the practice that a senior legal or management officer is appointed in the role of the CoSec who then delegates to an operative to attend Board meetings and the like without taking any further interest in the role. This can create challenges in acting in the best interests of the company, building relationships and unnecessary exposure to risks. The operative will be attending board meetings in an otherwise unidentifiable capacity from a Companies Act perspective and along with the registered CoSec is exposing themselves to risks and liabilities for the company’s failures. The simple solution would be either for the person who attends board meetings to be registered as a company secretary or for the appointment of a corporate body as a CoSec which would allow the proper delegation of such duties. Do you have the correct reporting line? The CoSec role can become a more demanding and challenging role than it need be, with the creation of inappropriate reporting lines for the role. The CoSec role has a natural accountability to the board of directors and the chairperson and consequently this is an implied situational reporting line. Just mess up with the board papers and you soon face the agitation of the Board. In a PLC the formal reporting line will usually be to the most senior legal counsel. However, local authorities have at times required the strategic CoSec role to report to middle management in the authority such as within the Contracts team. The CoSec and their work may be managed by someone with little understanding of the role and the support required. In addition, it simply adds another unnecessary layer of demands onto the role. It will, most likely, be essential for the de facto company secretary to keep the most senior legal officer of the local authority informed of any significant issues and other inter-related issues with the companies. If, clear and proper reporting lines are not established for the CoSec role, this will regularly place the person acting as the CoSec in very difficult situations that can only lead to frustration; by creating a complicated maze of conflicts of interests, breaches of confidence and moral dilemmas. A source of income generation for the legal department In a previous article for Local Government Lawyer, I explored local authority Alternative Business Structures (ABS) in which I mentioned the CoSec role as a source of real income generation for the local authority. This may not necessarily be directly from the delivery of the CoSec services to the company but from exploiting other opportunities for legal services. An experienced CoSec could identify such opportunities whilst playing an integral role with the Company. Also, the CoSec role is the mechanism by which to overcome SRA rules restricting the ability of the local authority to act for companies with insufficient nexus between them. Legal Services and their use of electronic time recording systems, sometimes treat the CoSec role in the same way as other legal roles for the purposes of charging companies for these services. There is, for example, considerable preparation for Board meetings, organisation, administration and report preparation that would come into the category of “non-chargeable” work that could not be billed to the client if it were a true “legal service”. At times, the CoSec role has been misunderstood as a ‘glorified’ secretary or a position for a junior lawyer to undertake. However, I would suggest that if it includes the function of a Legal Advisor to the Board then it is, at least, equivalent to the strategic role of a Head of Legal or the Monitoring Officer of the authority.