How the Roles of the Secretary and Lawyer are Distinctive in the Philippines
The modern corporate secretary is now considered a senior position beyond the ordinary course of duties. Corporate secretaries regularly offer advice and counsel to the board chair, executive director, and others and function as confidantes. Similarly, the board secretary signs legal documents as an agent for the corporation and bears custody of the corporate seal.
With that in mind, it raises the question: can your secretary and lawyer be the same person? At the end of the blog, we’ll get to answer the question conclusively.
Different Distinctive Roles
Today, companies are finding it useful to appoint a lawyer to fill the company secretary’s role. The appointed lawyer would perform the corporate secretary role, for instance, taking minutes of board meetings, at considerable cost. On the other hand, they would also have a clear legal understanding of the process being carried out.
Incidentally, the company secretary’s corporate governance role is uniquely different in comparison with the company’s internal and external attorney. Though many firms have blended the two roles for convenience, the corporate secretary’s vast set of responsibilities does not offer legal advice to the company.
More often than not, corporate secretaries do not possess any legal background. After all, it’s not at all the requirement to perform their responsibilities.
What is the Downside of Combining Roles?
There’s an increasing narrative in the corporate governance community about the separation of corporate secretary and legal counsel roles.
Here are some of the reasons for separating the two roles.
Ability to Perform Roles
Allowing the corporate’s counsel to operate as the corporate secretary weakens the legal counsel’s ability to perform their critical professional responsibilities. In any case, when the corporate secretary’s duties are assigned to the legal counsel, the performance may be inadequate because of their demanding responsibilities.
Again, the company lawyer may not possess the background and experience required to conduct the corporate secretary role. The moment the two roles are fused, the secretary’s duties get a “back seat” to the legal counsel’s function.
Independence between the Corporate Secretary and Lawyer
Every time the legal counsel is given the responsibility to take minutes at board and committee meetings and grace, other board meetings, it means that his/her capacity as a legal counsel is less pronounced. Consequently, the principle of independence between the corporate’s legal counsel and the corporate secretary is essentially compromised once the two roles are merged.
Conflict of Interest
When the same person performs the corporate secretary and the attorney’s roles, it arguably creates some conflict of interest. Again, when the two roles are done with the same person, it’s often unclear whether communications amongst the person executing both roles and the executive management constitute legal advice offered by the company’s attorney (protected by attorney-client privilege). Or corporate governance advice provided by the company secretary (not protected by attorney-client privilege).
Such ambiguity is subject to potential imminent litigation concerning communications. However, we cab evade such risk when there’s the separation of the legal counsel’s roles and the corporate secretary.
Therefore, it’s prudent for organizations to adopt procedures to follow the attorney-client nature of entire communications from corporate’s legal counsel to the board and executive management.
The moment there’s the separation of the corporate secretary’s role from that of the legal counsel, the company secretary gets autonomy to proactively conduct his/her roles effectively.
From the reasons mentioned above, we can boldly conclude that having a corporate secretary and lawyer to be the same person may not be beneficial to your company. A corporation may seek to outsource company secretary services to enhance its in-house corporate secretary abilities devoid of adding staff. But in the spirit of abiding by corporate governance, outsourcing or in-house legal counsel and corporate secretary, each profession focusing on their professional responsibilities will enhance high productivity. Therefore, it’s prudent to separate the corporate secretary and lawyer’s role in your organization or company.
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