Guide on Appointing Corporate Secretaries in the Philippines for New Companies

A Corporate Secretary is a “unique” corporate officer. They are neither a member of the Board of Directors nor part of the line management. Considered as the glue that holds the entire organization together, they are responsible for ensuring the company stays in compliance with both regulatory and statutory requirements. 

Their specific obligations can vary among corporations, but these are usually outlined in the company’s by-laws. 

In the Philippines, the role of Corporate Secretary can only be delegated to Filipinos who are both a citizen and a resident. Despite recent amendments on removing the need for Filipino residents to comprise the majority of incorporators (founders) of a corporation, the strict requirement of appointing an individual who is both a Filipino citizen and resident for the role of Corporate Secretary remains the same. This statutory requirement is a testament to the importance that Corporate Secretaries hold for ensuring responsible corporate governance and timely compliance. 

Requirements for Appointing Corporate Secretaries in the Philippines

To be eligible for appointment as a Corporate Secretary, an individual is required to be both a resident and citizen of the Philippines. Under the law, they are required to document minutes of board meetings and ensure actions of the board during such meetings are acted in good faith and in accordance with the law. Subject to the specific by-laws of the corporation, they can be granted other duties and responsibilities (provided they are under the bounds of law and accepted practice). 

Responsibilities of a Corporate Secretary in the Philippines

Scheduling and Documenting Board Meetings

The primary duty of a Corporate Secretary is to schedule board meetings, comply with meeting notice requirements, and document the minutes of each meeting to maintain the integrity and validity of such meetings. They must also document changes to the share capital and election and resignation of directors.

They are required to arrange a set of board meetings for the current year and put the Board of Directors on notice before each meeting. If appropriate, they may organize the venue, lodging, transportation, and food for the meetings.

Record Keeping

Corporate Secretaries are also tasked with maintaining the records and books of the corporation. More than a timekeeper, they must organize and secure the documents of the corporation, such as but not limited to the following:

• registration certificates
• the annual General Information Sheet (GIS)
• board resolutions
• stock and transfer books
• records of the stocks issued
• minutes of all board meetings (whether routine or non-routine)

Other Responsibilities

Corporate Secretaries also act as the inspector during a corporation’s Election of Directors. They are responsible for ensuring the proper conduct of the election by performing or supervising the exercise of the following:

• determination of the number of shares of stocks;
• existence of a quorum;
• validity and effect of proxies;
• addressing of issues and questions regarding the right to vote;
• counting and tabulation of all votes, ballots, or consents; and
• announcement of election results.

Also, since meeting minutes must accurately describe the final decisions of the board for a particular meeting, their dissemination and implementation must be properly executed. Corporate Secretaries are the officers of the corporation expected to effectively communicate the resolutions of the Board to concerned parties. A certificate from the Corporate Secretary is often required as proof that the Board issued a resolution.

Moreover, subject to the designation of the company’s President, the Corporate Secretary can act as an advisor to the Board of Directors. They can advise the Board on their individual duties and responsibilities and offer recommendations on corporate governance.

What Are the Core Competencies of An Effective Corporate Secretary?

When looking for the right Corporate Secretary to appoint, corporations must take note of the following core attributes:

• Exemplary organizational skills
• In-depth knowledge of corporate and securities law
• Thorough knowledge of company by-laws, business activities, and compliance requirements
• Ability to overcome, or not bothered by, bureaucratic thinking in the company
• Ability to read signals and provide early warnings to the Board and management
• A calm and rational mediator
• An effective and patient communicator
• A strong sense of balance, no matter how pressed a situation is