What board chairs look for in corporate secretaries

Aug 29, 2016
<p>Helping the chair make the best use of directors, manage the board&rsquo;s time and provide management&rsquo;s view on committee effectiveness are key duties &nbsp;</p>

The Canadian Society of Corporate Secretaries opened a new era last week at its 16th annual conference in Whistler, British Columbia, starting by changing its name to Governance Professionals of Canada, which was approved by more than 95 percent of its membership.

This year’s conference had a nice symmetry that reminded attendees coming and going of the critical role they play in helping boards to operate at their highest capacity. Trying something different, the opening plenary session on August 22 featured a dialogue among current and former board chairs about the corporate secretary’s role, taking to heart the persistent emphasis on tone at the top. 

‘In the past, a lot more effort has been put into [the selection of the] general counsel role than the corporate secretary’s role, and I think that’s a mistake,’ said Dick Auchinleck, chairman of the board of TELUS Corp. ‘A lot of companies and boards are not thinking about it as carefully as they should be.’

Margie Parikh, board director at On Governance and former chair of Mountain Equipment Co-op, recommended that the selection of the corporate secretary not be left to the chairman alone. If the chair doesn’t invite input from other directors, the decision may come back to bite him in the future, she warned. Parikh said she looks for someone who is confident, intuitive and willing to step up and voice an informed opinion. The role calls for someone who is able to understand the nuances and intricacies of his or her relationships with both the chair and the CEO. Needless to say, the corporate secretary must be someone who can do the work of many and wear many hats because of how high directors’ expectations are, she added.   

Helping directors to better understand the corporate secretary’s function and give it the respect it deserves enables the corporate secretary to play a more meaningful role in board matters, said Carol Hansell, founder and senior partner of her own governance consulting firm, who moderated the panel.    

There was some lively debate about whether it’s appropriate or constructive for the corporate secretary to confront individual directors when their behavior is out of line, such as arriving late for meetings, leaving early or constantly using their handheld devices during meetings. Some said that is better left to the chair to handle, especially given that director behavior comes up in peer evaluations. The corporate secretary, if he or she sees certain kinds of behavior, shouldn’t hesitate to bring it to the chair’s attention, however.

Mary Jordan, chair of the Vancouver Airport Authority, said she encourages the corporate secretary to get to know directors individually and familiarize themselves with the role each plays on board committees. ‘As chair, I look for good independent advice from the corporate secretary as to what management thinks of the support they’re getting from specific board committees and task forces on various issues,’ she said. ‘I can’t get that information about management’s perspective without the corporate secretary.’

In addition to the dynamics between the corporate secretary and board members, panelists discussed practical considerations concerning his or her role in shareholder engagement and coordinating information packets for board meetings. ‘Board materials have to be not only organized, but topped off with something that says Here are the governance implications of this item and these are governance implications of our strategy,’ Parikh said.

When it comes to shareholder engagement, the corporate secretary’ office plays a critical role in fielding requests from shareholders for access to directors. ‘It requires a delicate touch. You want to leave shareholders with the feeling they’re being heard’ without necessarily granting everyone access, said Auchinleck. ‘We use the corporate secretary’s office to filter requests before deciding whether it’s most appropriate for the IR office to respond, or the board, or management.’

Jordan said she relies on the corporate secretary as ‘a critical partner’ in helping to ensure she makes the best use of all the board members. That starts wit jointly planning the board calendar for the year in terms of what needs to be accomplished for the year. Ensuring that key strategic matters are built into the board calendar helps avoid filling up the calendar with things that are topical but aren’t the most critical issues to be focused on, she said.

Anna Tudela, corporate secretary and head of diversity and regulatory affairs at Goldcorp, made a complementary point during the final plenary session, which focused on board and director effectiveness, held on August 24. In setting the agenda for each board meeting, she said she sends it to the people responsible in each department such as in Human Resources for compensation and the CFO for audit-related issues. ‘I speak to each person who will be presenting and review their presentations. They have to meet time allocation and if they need more time they have to tell me why,’ she said. Another way to conserve time is to leave the consent agenda, which includes matters don’t require discussion, for the end of each meeting. 

‘[Regarding] the use of the board’s time, the approach has been way too casual,’ said Peter Dey, chair of Paradigm Capital and a member of Goldcorp’s board, who was also on the final plenary’s panel. ‘Anna’s initiative has made [Goldcorp’s] board much more effective. Before getting to the boardroom, the agenda has to be confirmed with the chair and the chair has to be satisfied that everyone presenting is right person to present.’

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