The Capital Markets Authority (CMA) has announced plans to limit the number of companies that company secretaries can serve to a maximum of three.
This decision comes in response to a growing trend of company secretaries working for multiple firms simultaneously, as highlighted in CMA’s latest report on corporate governance among Nairobi Securities Exchange (NSE)-listed companies.
The CMA expressed concerns that managing responsibilities across several entities could lead to delays in performing essential duties, reduced focus on specific company needs, and ultimately, a decline in the quality of governance support provided to boards.
“Juggling responsibilities across various entities may lead to delays in fulfilling critical duties, a diminished focus on company-specific needs and ultimately, a reduction in the quality of governance support provided to boards,” said CMA.
CMA announces plans to regulate number of firms company secretaries can serve
The Authority is now seeking stakeholder feedback on this proposed limitation, similar to the existing restrictions for directors under the corporate governance code.
While acknowledging company secretaries’ valuable expertise, the CMA warns that overcommitment could compromise their ability to deliver dedicated and effective service.
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The corporate governance code, enacted in 2016 and made mandatory from December 2023, reduced the number of directorships a board member can hold from five to three.
However, it does not currently restrict the number of listed companies a secretary can support, allowing them to serve multiple firms concurrently.
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Recognizing the crucial role of company secretaries in promoting good corporate governance, the CMA is consulting with stakeholders to establish a similar cap for these professionals.
Duties of a company secretary
Capita Registrar defines a Company secretary as a senior position in a private company or public organization, normally in the form of a managerial position or above.
Some of the duties of a company secretary include:
- Monitor and ensure that the company operates in compliance with all applicable laws and regulations, including provisions of the Companies Act.
- Prepare and submit all required documents to the Registrar of Companies, such as annual returns, changes in directorships, and share allotments.
- Advise the board of directors on corporate governance best practices, the legal implications of their decisions, and ensure adherence to proper meeting procedures.
- Implement and monitor corporate governance policies to promote ethical conduct within the company.
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In 2024, Millicent Ng’etich made headlines on social media and sparked a debate after it was revealed that she holds the position of Company Secretary for four prominent companies: Standard Group PLC, Sasini PLC, Sameer Africa PLC, and Nairobi Business Ventures.
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