How company secretary responsibilities are evolving in Malaysia
Historically, the responsibilities of a company secretary were limited to basic administrative tasks such as minute taking, annual return filing, editing company constitutions and other internal office duties. But the role is evolving as business management and corporate governance grow increasingly complex and gain greater importance.
In modern-day Malaysia, the company secretary is an executive-level role tasked with a wide range of important responsibilities across multiple business functions. As such, the company secretary plays a critical role in helping a business reach its maximum potential.
In this article, we explore the evolving role of a company secretary, and how a skilled company secretary can help your business gain a competitive advantage.
Why is a company secretary important?
Company secretaries carry out various duties to support the running of a business: importantly, they ensure full compliance with the Companies Act and related regulations.
If your goal is to succeed in business, particularly in competitive markets, do not underestimate the value of an experienced company secretary. They will be able to help elevate your governance practices in a way that maximises both benefits and performance.
Company secretarial services can include:
- establishing the best structure for your business;
- lobbying for the development of a strong environmental, social and governance strategy, known as ESG in Malaysia;
- ensuring regulatory compliance; and
- implementing contemporary corporate governance practices.
The company secretary acts as a voice of reason, ensuring your business pursues its goals with equal determination and integrity.
The role of a company secretary in Malaysia
The rules and regulations for company secretarial services vary across the Asia-Pacific (APAC) region. In Malaysia, businesses are required by law to appoint a company secretary after incorporation.
Common duties for company secretaries in Malaysia include:
Company secretaries can help at every stage of business, from registering a company to closing a company.
How has the company secretary role evolved?
While company secretaries used to have very little authority, today they are well-versed in local laws and regulations. This means the role has taken on a key business advisory function: directors and shareholders can seek the company secretary’s advice on the best way to handle compliance matters.
New focus areas for company secretaries include guiding the board on ESG and matters of legal compliance.
Environmental, social and governance
Rising expectations from regulators, investors and customers for strong ESG in Malaysia means businesses are under mounting pressure to demonstrate good governance. According to a 2020 KPMG survey, sustainability reporting in APAC has grown from 78–84% since 2017.
The company secretary’s broad involvement in both business operations and board activities means they have a crucial role to play in ESG advancement.
Company secretaries can support ESG performance by:
- helping devise contemporary ESG measures (e.g. introduction of a whistleblower protection policy);
- working collaboratively with the sustainability team to manage and control ESG risks and opportunities;
- arranging regular ESG auditing; and
- assisting with transparent ESG reporting in the company’s annual report.
Keeping up with statutory requirements and advising updates to the legal team is a core responsibility of the company secretary. While the company secretary is not held accountable for legal decisions, directors and management teams must be able to trust that the company secretary’s compliance advice is reliable and up to date.
On top of this, company secretaries must help the company prepare for all types of legislative uncertainty.
Company secretaries support legal compliance in many ways, including:
- planning and coordinating shareholder and board meetings and taking attendance;
- preparing shareholder and board resolutions;
- ensuring timely filing of all necessary returns with the Companies Commission of Malaysia;
- updating the Companies Commission on changes to statutory information;
- ensuring compliance with Securities Commission legislation;
- reviewing and preparing corporate governance reports for inclusion in annual reports; and
- helping the company meet the requirements of Bursa Malaysia.
The best company secretaries can develop tailored compliance solutions that satisfy requirements without costing unnecessary resources.
Top challenges in company secretarial services
Key qualities to look for in a company secretary include adaptability and strong communication skills. These attributes are crucial for overcoming common challenges in the compliance space.
Here are the three main challenges company secretarial services may face.
1. Keeping up with changing regulations
The biggest obstacle for company secretaries is keeping their organisations compliant amid rapidly evolving regulatory landscapes. One way they support ongoing compliance is by working hand-in-hand with regulators.
Company secretaries act as a vital link between organisations and authorities. They are able to access information about regulatory changes before they are made and can therefore help their organisation prepare in advance.
This way, there is no big rush to adjust processes or take action once the changes come into effect.
2. Developing tailored compliance solutions
A successful compliance framework will look different for every business depending on its location, size, industry and listing status. This means company secretaries must have the skills to devise tailored business solutions for their organisation in line with the company’s constitution and within the framework of the Companies Act.
When properly customised, a compliance framework supports a business to operate with integrity while also performing well in its industry.
3. Obtaining buy-in from stakeholders
Sometimes, companies fail to see the value of investing in a skilled company secretary. This is usually due to a poor compliance culture, where compliance is viewed as a burdensome box-ticking exercise rather than an opportunity to advance company goals.
It is the responsibility of the company secretary to oversee compliance activities across the organisation.
They should help the directors, shareholders and all staff to understand:
- why statutory, regulatory and corporate requirements exist;
- why the organisation must comply with these requirements; and
- how the organisation and its people benefit from strong compliance.
To ensure your business remains in strict compliance with all relevant requirements, make sure to appoint a company secretary that takes compliance very seriously.
Partner with a company secretary you can trust
If your company secretary lacks the right qualifications, skills or attitude to support good corporate governance, your business will be at risk of penalisation for failing to fulfil its compliance obligations. You may also miss out on valuable opportunities to improve your efficiency, productivity and profitability.
Many organisations choose to streamline their operations by engaging in a reputable third-party corporate services provider. With this approach, executive staff can worry less about compliance obligations and focus more on business growth.
Additionally, you can:
If your organisation has plans to expand across APAC, it is important to consider and prepare for the new set of regulations and cultural nuances each region will bring. You will also need to adhere to legislative requirements for any international partnerships you establish.
The complexity of your operations can increase however if you engage corporate service providers in each region to meet relevant requirements.
Gain a competitive advantage
If your aim is to achieve successful business growth across APAC, BoardRoom provides a full suite of corporate services to suit your needs. Our Malaysian company secretary team stays up to date on regulatory developments and industry best practices to provide you with insightful advice every step of the way.
To find out more about partnering with a skilled corporate secretarial team, chat with our specialists today.
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