The new role of the company secretary
Increasing regulatory complexities and the growing need for corporate legal entity data is putting pressure on the company secretary to take on more responsibility.
Since the 2009 banking crisis, the need for corporate legal entity data has been fueled by regulatory reform in US taxation law (FATCA), and by the European Market Infrastructure Regulation (EMIR) and the Dodd-Frank Act. These have all mandated additional requirements, especially for reporting purposes. These new requirements have raised questions regarding the broader definition and ownership of internal corporate data within banks.
Historically, corporate legal entity information has been held and maintained within banks by the company secretary. Industry findings show that the systems used by company secretaries do not provide enough functionality to meet the new regulatory requirements. Banks have often overlooked the role of company secretary and seen the position as responsible solely for regulatory or statutory reporting, but this is now changing.
Banks are struggling to define internal corporate data, who owns it and who manages this information. Many banks do not have a sustainable operating model and are looking to the company secretary to step up to the challenge, increasing the scope of the role to meet this demand.
In addition to new reporting requirements for FATCA, EMIR and Dodd-Frank, banks also need to adhere to new entity identification guidelines through a scheme called legal entity identifiers (LEI). The CFTC Interim Compliant Identifier will be the LEI registration repository and the implementation and management of LEIs will be challenging for global banks, as the company secretary will have an increased number of entities to manage. Company secretarial teams do not currently have the appropriate organizational design to implement such an operating model and many changes will need to be made.
Previous technical solutions used by most company secretaries are inadequate and need to be assessed to determine a fit-forpurpose solution and, potentially, a new technology solution.
To meet the increasing regulatory complexities, banks are required to report a wider set of internal corporate data and would be wise to assign these tasks to a single owner.
Banks must also produce a clear definition and policy framework for internal corporate data to manage their corporate legal entity structure; implement tactical solutions to address data quality issues or incomplete data in the short term; and initiate strategic solutions immediately to manage internal corporate data holistically.
The operating model for managing this data needs to be enhanced. If banks are going to meet these new and growing demands, the current organizational design and role definition for the company secretary will need to be reassessed.
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