In our globalized economy, organizations tend to be present in multiple jurisdictions as part of their global growth strategy. Every jurisdiction operates within their own specific legal framework and it is essential for board members to fully understand the rules and regulations that apply in each location, and keep up-to-date with statutory changes to make sure the companies they represent are compliant in all aspects. This can be a challenging and time-consuming process, and the penalties for non-compliance can be devastating to a company’s bottom line. The Corporate Secretary function was created as a means to ensure corporate compliance and give the board of directors piece of mind.

The name of the corporate secretarial function is somewhat misleading. Even though the Corporate Secretary would handle some tasks of a more administrative nature, such as organizing board meetings, taking the minutes, or following up on some of the decisions made by the board of managers, e.g., mandatory filings to competent authorities and notifications to shareholders, the role has grown into an advisory function for the board. More importantly, the Corporate Secretary is fully aware of the legal framework that applies at all times and in all circumstances, and can follow the company throughout its life cycle, making sure no compliance steps are missed along the way.

As the level of regulation is increasing, and substance requirements are on the rise due to changes in the tax and regulatory environment, the board of directors must make sure they build their governance strategy on a foundation that is compliant with and adapted to the full spectrum of applicable legal, tax, and regulatory requirements. The board of directors should have a clear process in place to discuss and decide on all steps regarding the investment and financing that the company should enter into. This process should be implemented through the set-up of regular board meetings reflecting the different phases of the investment and financing life cycle.

The organization of the board meetings, including the content presented and discussed, as well as the output of the meetings are key points that serve to demonstrate the substance and corporate governance activities of a legal entity—evidence that the board of directors is granted enough time to review the documents before making any decisions, and evidence reflected in the content of the board minutes that a discussion and a deliberation process took place and a final decision was made. The Corporate Secretary function is there to lead the board through the maze of information gathering, regulatory steps, statutory deadlines, and thereby avoid pitfalls. Based on the input and guidance from the Corporate Secretary function, the members of the board of directors are able to make informed decisions that respect the rules for corporate governance.

While a majority of tax, regulatory, and legal advice is provided on a case-specific and project-based manner often related to the set-up or the implementation of an investment or financing strategy, the Corporate Secretary function follows up on corporate, legal compliance aspects throughout the year. It makes evaluation and risk assessments as well as continuous monitoring natural parts of the board’s agenda. By doing so, the Corporate Secretary is an important and knowledgeable resource for the board of managers and essential in ensuring a proper and compliant corporate governance.

Anne Catherine Grave is an economist and a lawyer and has thorough experience in senior management positions in the financial industry in Luxembourg. She is a chartered accountant in Luxembourg and a qualified attorney in France and Luxembourg. Anne Catherine Grave previously served as a director on the board of various companies and has thorough experience with corporate compliance and the legal framework in Luxembourg.