Definitions

Updated 7 months ago by Nathan Grivas

This list has been created to provide a brief overview for users to better understand the roles of company executives and other key individuals in the world of corporate governance:

Company Secretary

The company secretary can be viewed as the chief governance specialist within an organisation. The board relies upon the company secretary to provide advice and implement good governance practices. It must be noted that a person may be both a director of a company and the company secretary. 

According to the Corporations Act 2001, the company secretary has the following key responsibilities:

  1. Notifying ASIC with regards to changes of the identities, names and addresses of the company’s directors and company secretaries.
  2. Notifying ASIC with regards to any changes to the register of members.
  3. Notifying ASIC with regards to changes to any ultimate holding company.
  4. Responding, if necessary, to an extract of particulars that the company receives and ensuring that the company responds to any return of particulars that it may receive.

Advisor

An advisor can be seen as a mentor or guide of an organisation. They understand the organisation's targets and share their insight into matters with key stakeholders. Advisors generally identify issues in their early stages of development to prevent them from becoming problems for the organisation in the future.  

The key responsibilities of advisors differ depending on the type of advice they provide. Examples of advisors include the following:

  1. Accountant 
  2. Lawyer

Director 

The role of a company director is to govern a company on behalf of the shareholders or members of that company.

According to the Corporations Act 2001, the company secretary has the following key responsibilities: 

  1. Care and diligence – This duty requires a director to act with the degree of care and diligence that a reasonable person might be expected to show in the role. Court cases have emphasised this duty in relation to the approval of financial statements and board approval of statements issued by a company. There can also be a breach of this duty by causing a company to enter into risky transactions without any prospect of producing a benefit or where a managing director fails to inform the board of matters which clearly should have been brought to the board's attention. 
  2. Good faith – This duty requires a director to act in good faith in the best interests of the company and for a proper purpose, including to avoid conflicts of interest, and to reveal and manage conflicts if they arise. This is a duty of fidelity and trust, known as a ‘fiduciary duty’.
  3. Not to improperly use their position – This duty requires directors to not improperly use their position to gain an advantage for themselves or someone else, or to the detriment of the company.
  4. Not to improperly use information – This duty requires directors to not improperly use the information they gain in the course of their director duties to gain an advantage for themselves or someone else, or to the detriment of the company.

Chairman

The chairman is usually appointed by fellow board members, rather than directly by the organisation’s members or shareholders. The chair acts as an important link between the board and the organisation’s management via the CEO. 

The role of the chairman is not outlined in the Corporations Act 2001, therefore many of the following functions of the chair are customary rather than formalised by law:

  1. Acting as an important link between the board and management but without necessarily preventing direct access of fellow directors.
  2. Establishing and maintaining an effective working relationship with the CEO. 
  3. Chairing board meetings efficiently and shaping the agenda in relation to goals, strategy, budget and executive performance. 
  4. Overseeing negotiations for the CEO’s employment and evaluating the CEO’s performance.  
  5. Assisting with the selection of board committee members.

Public Officer

The public officer is responsible for the company's obligations under the Income Tax Assessment Act 1936 and the regulations.

A public officer is responsible for attending to the tax affairs of a company. The public officer can be held answerable for numerous activities and duties which are required to be performed by the company, including:

  1. The submission of annual tax returns and provisional tax returns. 
  2. Make available documentation required by the auditor for the purpose of preparing annual financial statements.
  3. Record keeping and submitting company returns.
  4. Notification of address changes and acceptance of notices served against the company.

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