Board Governance Framework and the Company Secretary

What is_a Board Governance Framework and Company Secretaries Role Diligent Company Secretary Software.

The Board Governance Framework and the Role of the Company Secretary

A board governance framework should define how the board will oversee risks across all regions and businesses. Governance models should bring balance and improved communication between those making decisions about risks and risk managers. The role of the company secretary in the UK is key in establishing the board governance framework for an organisation. Today, the company secretary has the responsibility of advising the board on governance. Working with the chairman, the company secretary must determine the decision-making structure for the board, its committees and its division of control with management.

To this critical task, the company secretary should bring a thorough understanding of the organisation and its goals, a strategic outlook, and good relationships with all board members and top management.

“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,” comments the London-based Board Advisory firm Stonehaven in a note.

Company Secretary Designs Board Governance Framework

The company secretary is responsible for the design, implementation and maintenance of a properly structured board governance framework – this structure effectively determines how boards make decisions and how efficiently they perform.

“A board governance framework is the solution to ‘management by memo,’ writes Deloitte in a report.

In practice, a board governance framework should:

  1. Organise operational, financial, risk management and board reporting processes such that the board receives the information it requires to effect good governance and management, and the business units can conduct their activities in ways that comply with regulations and serve strategic ends;
  2. Bring the organisation’s governance framework down to the level of roles, responsibilities, reporting lines and communications to bridge the gap between the governance framework (discussed in the following section) and operational realities.

The first step for the company secretary is to review the board’s mission statement and its bylaws so that all procedures are set up according to the priorities of the organisation.

Then a basic workflow should be determined, moving issues from the purview of the chairman to either committees, the board as a whole or management in conjunction with the board. Obviously, the number and types of committees that are needed must be decided first – this may be a question for the board as a whole.

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Board Governance Framework and Strategy

Part of the company secretary’s role is to help the board navigate between planning, playing an actual role in the activities and then monitoring those activities. Where strategy, accountability, succession and risk governance are concerned, those areas are to be broken down into segments by the chairman in specific subject areas; then, in terms of priority, brought before the board as a whole. Where specifics like executive pay or financial controls are at issue, these can be delegated to the appropriate committees – Audit and Remuneration. In these areas, due to legal or regulatory requirements or stakeholder expectations, the board committees are active parties in the structures and processes, and in decisions and duties that cannot be delegated to management.

The strategy provides a good example for this process. The board as a whole is responsible for strategy; management is responsible for implementing it. For some organisations, where strategy elaboration is a critical factor, there is a Strategy committee. For others, a single strategy day is all that is required to fine-tune existing strategies.

In either case, the question then becomes: Where does management join with the board in developing strategy? The answer is that management should join discussions whenever their input can be useful. Management should not be permitted, however, to take over strategy development – this can happen where there is a powerful CEO – and a strong board corporate governance framework helps to define and limit management’s role in this area.

In terms of risk controls and accountability, the governance framework should establish the authority that presides over compliance, risk, legal, finance and audit matters. The organisational design and reporting structure should be made clear to employees and stakeholders.

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Company Secretary Must Finalise the Board Meeting

Essentially, the board corporate governance framework should also define how the board will oversee risks across all regions and businesses.

The governance model should specify authority and accountability for key roles and identify a governance process for managing disagreements. Governance models should bring balance and improved communication between those making decisions about risks and risk managers. The model should also ensure that individuals know the rights and limits associated with their decisions. Boards should acknowledge the control functions at the regional and global levels.

Diligent Governance Cloud Enables Developing a Robust Board Governance Framework

With so much at stake and so much to oversee, boards need the assistance of board management to help them address the issue of improving governance practices. Diligent Boards and the integrated suite of governance tools in Governance Cloud is the perfect solution for boards working on their board governance frameworks. Having a fully integrated modern governance solution will aid board directors in developing governance frameworks that work for the benefit of the board, the managers, shareholders and stakeholders.

To ensure that all this activity remains confidential, Diligent’s Governance Cloud boasts high-level security in each of its programmes, including:

Good governance isn’t just one thing – so why use board management software that only manages your board documents? At Diligent, we empower leading organisations around the world to turn good corporate governance into a competitive advantage for their business. In the ever-changing landscape of the world, governance hasn’t kept up with the fast pace of business. Quarterly board meetings, paper board books and not using secure communication tools for sensitive data have opened up numerous companies to risk.

Diligent’s board assessment tool enables the evaluation of what the board does well and where it needs improvement. The board can set up benchmarks to review performance and monitor how the framework is functioning. And this can be done in complete confidence that the discussion will remain confidential.

With Diligent, boards can gain a competitive edge to improve governance by having the right information, analytics and insights to spot risks, act on opportunities and turn insights into action.


Learn how Diligent’s modern governance solution can empower today’s board members and company secretaries to achieve key outcomes. Request a demo today

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With the right Board Portal software, a board can improve corporate governance and efficiency while collaborating in a secure environment. With lots of board portal vendors to choose from, the whitepaper contains the most important questions to ask during your search, divided into five essential categories.

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