The Company Secretary: Origin, Status and An Appraisal Under The Companies And Allied Matters Act (CAMA) 2020

376 views | Chinemerem Nnawuihe | September 15, 2020

Origin Of The Company Secretary

A secretary occupies a very important position in all administrative spheres. They are literally referred to as “keepers of Secrets” and have been found to be indispensable throughout history.

Before the Europeans came to Nigeria, many kingdoms and Empires had administrative functions and duties which were performed by officers who did not necessarily bear the title of secretary. The influence of the Europeans and their introduction of English type corporate business concept and the Joint Stock Company marked the origin of the company secretary in the country.

The origin of the company secretary in Nigeria could also be traced to the enactment of the following Laws:

  1. The Companies Ordinance 1912.
  2. The Companies (Amendments and Extention) Ordinance 1917.
  3. The Companies Ordinance 1922 (and the1929, 1941 and 1954 amendments).

Although the secretarial profession dates back to the 16th Century, company secretaries became a vital cog in the machinery of commerce with the development of the Limited Liability Company first recognised by the Limited Liability Act (UK), 1855. When the Joint Stock Companies Act, (1856) was enacted, it gave guidelines for company administration and the secretary was to play a crucial though largely unrecognised role.

The job of a company secretary became professionalised by the establishment of the Institute of Chartered Secretaries and Administrators in 1891 in England. The Institute got a legal backing in 1902, when it received a Royal Charter and thus became the Chartered Institute of Secretaries of Joint Stock Companies and Other Public Bodies. In 1971, its wider role was recognised formally by an amendment to the Institute’s Charter, which gave it the name, Institute of Chartered Secretaries and Administrators by which it is known today.

The Nigerian counterpart was established in 1958; it was granted autonomy in 1988; incorporated under the Companies Act 1968 and registered in October 1988 as the Institute of Chartered Secretaries and Administrators. It became chartered by its enabling statute, Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) Decree No 19 of 1991.

Status Of The Company Secretary

In the Companies Act of 1968, the company secretary was for the first time defined as an “officer” of the company and this made him to be legally liable under certain circumstances in the operation of the Act.

In spite of this designation of the company secretary, he was far from being recognised as a person of experience and profession in strict terms. It was in the Companies and Allied Matters Act, (CAMA) 1990 that a secretary became well recognised and directors were at last required to pay attention to the ability of the person they appointed as a secretary. The status, functions and duties of a company secretary were elevated in CAMA 1990.

Before the enactment of CAMA 1990, the attitude of Nigerian Law to the company secretary was a reflection of English Common Law. Under the 1968 Companies Act, although there were provisions on the company secretary, the Law did not give the company secretary any more status and functions or confer any higher authority than the English Common Law did.

In applying the provisions of the 1968 Companies Act, the attitude of the Nigerian judiciary was to see the company secretary as occupying a low rung in the ladder of the managerial structure.

In the case of Migliore V Metal Construction (West Africa) Ltd (1977) 3 FRC R 117 at 120, the status of the company secretary had various interpretations. The Federal High Court regarded a company secretary as: “limited and of somewhat humble character……mere…..servant to do what is told”. “He is no more than an administrative officer of the company”. The Court of Appeal held that, the company secretary is a “principal officer of the company”.

In the above case, the court also pointed out that, the primary function of the secretary is to carry out the decisions of the directors. The Law does not invest in him any power to take an independent decision concerning the management of the company. He cannot in Law even be a legal adviser as to the Directors’ or shareholders’ rights or as to the interpretation of the provisions of the Articles of Association of the company. His duty is to present what is given to him to the Board to take any decision upon it.

In the case of Adebesin V May & Baker Nigerian Ltd (1978) 4 FRCR 232, the status of the company secretary was defined thus:

“The secretary is an officer of the company with important duties and responsibilities. The secretary merely acts in a ministerial and administrative capacity. He has no managerial powers and any managerial powers are prima facie vested in the directors and any managerial directors”.

In the case of Wimpey (Nigeria) Ltd V Balogun (1986) 3 NWLR (Pt 28) 324, the company secretary was regarded thus: “A company secretary is indeed a high ranking officer in the company set up and is indeed part of the management of the company”.

By the provisions of CAMA 1990, the company secretary was given a status that befits his position in modern corporate management structure. It clearly spelt out the duties and functions of the company secretary. Therefore, his duty was no longer limited to what was defined by the Board of Directors.

The Company Secretary Under The New CAMA 2020

The qualifications, status and appointment of the company secretary has been modified under the new CAMA. It is an improvement on the provisions of CAMA 1990.

Appointment Of A Company Secretary

Section 330(1) of CAMA 2020 provides that every company except a small company shall have a secretary.

Under the CAMA 1990,  there was no restriction on the type of company that must have a secretary; the Law only required every company to have a secretary.

By the provisions of Section 330(2) any public company that has not appointed a secretary at the commencement of CAMA 2020, must appoint a secretary not later than six (6) months after the commencement of the new CAMA.

It is the Board of Directors that appoints a secretary – Section 333(1); therefore, while making the appointment, extra care has to be taken to appoint a person with the requisite knowledge, skill and experience to carry out the duties and functions of a secretary as set out by Law. It is the Board of Directors that determines the requisite knowledge and experience.

In the case of a private company, no special qualifications are required for the Board to arrive at its decision on whom to appoint as a secretary but for a public company, in addition to the requisite knowledge, skill and experience, Section 332 has set out the requirements/qualifications for the appointment of a secretary. It provides that a secretary shall be:

  • A member of the Institute of Chartered Secretaries and Administrators; or
  • A legal practitioner within the meaning of the Legal Practitioners Act; or
  • A member of any professional body of accountants established from time to time by an Act of the National Assembly; or
  • Any person who has held the office of the secretary of a public company for at least three (3) years of the five (5) years immediately preceding his appointment in a public company; or
  • A body corporate or firm consisting of members each of whom has the qualifications in the first three paragraphs above.

Section 330(3) provides that, where the office of a secretary becomes vacant, an assistant or deputy secretary or if there’s none, any officer of the company authorised generally or specially in that behalf by the directors can perform his functions. However, the Law is silent on the qualifications of the assistant or deputy secretary. It may therefore be safe to assume that, any person appointed into the position of an assistant or deputy secretary shall also possess in addition to having the requisite knowledge, skill and experience, any of the requirements/qualifications set out under Section 332.

Removal Of A Company Secretary

The Board of Directors being the appointing authority of the company secretary can also remove him from office. The circumstances under which the directors can remove the secretary of a private company is quite easy; what is required is a compliance with the the Articles of Association of the company or any conditions of appointment of the secretary.

It must be noted that the power vested on the Board of Directors to remove the secretary cannot be exercised by a Managing Director.

Section 333(2) has laid down the procedure to be followed by the Board of Directors of a public company to remove a secretary from office. It provides that the Board must give the secretary notice:

  • Stating that it is intended to remove him.
  • Setting out the grounds on which it is intended to remove him.
  • Giving him a period not less than seven (7) working days within which to make his defence.
  • Giving him an option to resign his office within a period of seven (7) working days.

If the secretary fails to resign or make a defence within the period given to him, the Board may remove him from office and make a report to the next General Meeting.

Where the secretary without resigning his office makes a defence that is not satisfactory to the Board in cases where fraud or serious misconduct is alleged, the Board may remove him and report to the next General Meeting.

Where the allegation is not a fraud or serious misconduct, the Board cannot remove him without the approval of the General Meeting but may suspend him and must report this to the next General Meeting. It is the General Meeting of the company that determines the effective date of the removal of a secretary who was suspended by the Board of Directors.

Duties Imposed On Companies

Section 336 provides that, every public company must maintain a register of secretaries which must contain the particulars set out in Section 337. These particulars may be verified by the Minister (of Trade) through Regulations.

Where the secretary is an individual, the particulars that must be contained in the register are:

  • The full name and any former name or names of the secretary.
  • The address of the secretary.
  • The Email address of the secretary.

Where the secretary is a body corporate or a firm, the particulars will be:

  • The corporate or firm name.
  • The registered or principal office.
  • The Email address.

Section 339(1) provides that, where a person becomes or ceases to be a secretary; or if there has been any change in the particulars contained in a company’s register of secretaries, the company must notify the Corporate Affairs Commission (CAC) of the change and of the date on which it occurred within 14 days.

The notice of a person who has become a company secretary must contain a statement of the particulars of the new secretary that are required to be included in the company’s register of secretaries and must be accompanied by a consent, by the person who is to act in that capacity.

If a company fails to notify the CAC of any changes as required under Section 399, the company and its officers shall be liable to a penalty for each day the default continues in such amount that the CAC specifies in its regulations.

Duties Of A Secretary

Section 335(1) has spelt out the duties of a secretary thus:

  • Attending the meeting of the company, the Board of Directors and its committees, rendering all necessary services in respect of the meeting and advising on compliance by the meetings with the applicable rules and regulations.
  • Maintaining the registers and other records required to be maintained by the company.
  • Rendering proper returns and giving notification to the CAC.
  • Carrying out such administrative and other secretarial duties as directed by the director or the company.

It must be noted that these duties are to be performed exclusively by the secretary and Section 331 prohibits the performance of any duty imposed on a secretary and a director by a person acting both as a director and a secretary.

The Company secretary is an indispensible and integral part of every company. The responsibilities attached to the office of a secretary are such that cannot be exercised by just anybody. This is why the Law has prescribed the qualifications for persons who ought to occupy this important position. They must be professionals who have obtained the requisite knowledge and professional training required to manage the secretarial and administrative affairs of a company.


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