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The companies and Allied Matters Act was enacted in 1990 and before this time, both the statute and the common law did not accord to the status of the company secretary the recognition and proper position which it deserves in corporate matters. The common law treated the position as a humble one. The company secretary was recorded as a mere management clerk, typist or servant whose position can be dispensed with like any other management staff. His position was contemptibly as was seen as an ‘errand boy’ of the company who was only seen to do and who only did what he was told to do, without an independent mind of his own to take decision regarding the company. But in 1971, Lord Denning MR. in a revolutionary judgement declared that times have changed a company secretary is much more important person nowadays that he was in 1887. He is no longer a mere clerk. This brought about the improved status for the company secretary which was strengthened in the 1990 CAMA. This research will examine the Appraisal of the duties and liabilities of the company secretary under the Nigerian Corporate Law. This research will also examine who the company secretary was and who he is, and what are his qualifications, powers, duties and liabilities under the Nigerian corporate law. It will also consider the importance of a company secretary in a company. Based on the findings drawn from this study, conclusion and recommendations will be made.  


1.0              INTRODUCTION

            The duties and Liabilities of the company secretary have been matter of concern to many writers, researchers, managers and administrators of diverse organizations. It is the vital life wire of corporate organizations. This is so because in Nigeria, every company is compelled to have a company secretary[1]. The company secretary is normally appointed by the Directors of a company as opposed to the General Meeting of Such company.

            However, the Directors are duty bound to take reasonable steps to ensure that their appointee is a person who has the requisite knowledge and experience to discharge the functions of a company secretary[2]. The appointee must fall into one of the categories specified in section 295 of Companies and Allied Matters Act (CAMA). The first of these categories consists of person with experience as company secretary who has held the office of secretary of a public company for at least 3 of the 5 years immediately preceding his appointment. The second category consists of members of various professions such as Accountants, Chartered Secretaries, Legal practitioners within the meaning of the Legal Practitioners Act, 1975)[3]. The third category is a body corporate or firm of qualified persons under the first two categories mentioned above. The above requirements exemplify the important role, which a company secretary occupies in corporate organizations, as well as the liabilities he incures for failure to perform these roles.

            In addition to the above, within the management circle of incorporate companies, there are certain persons referred to as principal officers. From the 19th Century, the limited liability companies have become more popular and this has brought about increasing complications in modern corporate management. Arising there from has been a need for renewed searchlight on these principal officers of a company. This need is not just necessary but imminent in view of the increase in the volume and size of commercial activities of these by the fact that the company being an artificial person could only act through its human agents, officers and organs, as was aptly summarized by Aniagolu (JSC) as follows:

            “A company although having a corporate personality is deemed to have human personality through its officers and agents[4]. Section 37 CAMA

            Moreover, every incorporate company operates under the principle of corporate personality and within this officers and organs for effective corporate management. In the corporate executive outside of the managing director and now the executive directors, there is a company secretary; similarly, between the board of directors and the shareholders, there should be an appointment of a competent, neutral and resourceful officer known as the company secretary. The status of this officer before now had always been treated with contempt and was not accorded the recognition and respect it demands and deserves. There was perhaps no other functionary in the corporate set-up who had suffered such a high degree of non recognition by common law as the company secretary even if his influence was felt in the boardroom. This status has however been improved and is now a very important officer because section 293 (1) CAMA[5]provides that, every company shall have a secretary and the qualification and duties of this officer is also clearly recognized by statutory enactment. It is arguable therefore that the company secretary occupies such important and influential position has in recent times graduated as an organ of the company. Professor Gower is of the view that he is an officer of the company with substantial authority in the administrative sphere with power and duties derived from the Articles and the companies Act[6].

            It is deducible from the above assertion that the company secretary has evolved from his hitherto position as a mere clerical officer or an “errand boy” of the company to an accomplished administrator in a corporate setting[7]. It is now established that the company secretary occupies an important and very influential position in this vehicle of economic endeavour and he is indispensable in public companies.

            Hence, this work aims at uncovering and appraising the rationale for the duties and liabilities of the company secretary and whether these duties and liabilities are of any beneficial and altruistic importance to the company as well as assessing the value worth of the company secretary in corporate government. In order to achieve these objectives, this work shall discuss the nature, the appointment, status, roles and responsibilities of the company secretary in a bid to appraising these duties and liabilities under the Nigerian corporate law.

1.1 Statement of the Problems  

It is generally believed that the duties and liabilities of the company secretary are very crucial and indispensable under the Nigerian corporate law. The CAMA has appropriately provided in section 293 for the office of a company secretary which is made mandatory by the use of the word ‘shall’[8].

            In most cases, despite the provision of the Act in respect of this office, some people have always been confused on what is the true worth or what is really the essential value attached to this and who should be the person to hold this office. One of the greatest challenges litigants are facing currently is what are the duties of the company secretary? And in what sort of act would the secretary be held liable and whether the secretary has authority than the directors[9]

1.2 Research Questions 

The following research questions were raised to guide the study.

·         Who is a company secretary?

·         How was the position of the company secretary before the enactment of CAMA?

·         How is the position of the company secretary after enactment of CAMA?

·         What are the qualifications which a company secretary must possesss?

·         What are the duties and liabilities of the company secretary?

·         Why is the company secretary liable in corporate governance?

·         Is there any altruistic importance attached to the position of the company secretary?

1.3 Justification of the Study

This research work seeks to appraise the duties and liabilities of company secretary under the Nigerian corporate law and to uncover the rationale why the position of the company secretary has been changed against what it was in 1887. Although there is an honest belief that this is not the first research work done in this direction, this work is significant in that it would act as a reference point to researchers in this feel and of great benefit to both students and company secretaries alike by contributing to and expanding their scope of knowledge not only as an academic work but also as a real life situation.

            Furthermore, as a reservoir of intellectual noesis it is hoped that this study will be of immense benefit to mankind in general.

1.4       Methodology

The approach and methodology to be adopted in this research work is historical and analytical. It is historical because of the position of the company secretary as an errand boy under the common law and the provisions of Pre-1990 CAMA.

            The account is also analytical in its critical examination as well as appraisal of the emerging issues and trends as to the true position of the company secretary. The materials for this research work are obtained from primary and secondary sources. Deductions are also gotten from works of scholars, case books, journals, internet etc.

1.5       Scope and Limitation  

Since this work is focused on a particular office in corporate governance, the scope of this work is within the duties and liabilities of the company secretary as it relates to the importance that is accorded to the office. This work had also limited its scope to the chapters out line as follows:

            Chapter one would attempt an introduction of this work, as well as a review of related literature. Chapter two would uncover who is a company secretary and the status of the company secretary under Pre-CAMA statute. Chapter three would consider the status of the company secretary under the CAMA while chapter four would look at the roles/Duties of the company secretary as well as an appraisal of the liabilities, then chapter five would consider the conclusion of the work and some recommendations.

Review of Related Literature

The focus of this work is on the appraisal of the duties and liabilities of the company secretary under the Nigerian corporate law. There are a number of literature on this work in Nigeria and abroad. It should be noted that most of these works on this subject have concentrated majorly on the changed position of the company secretary compared to the status of the company secretary before the CAMA. However, very few works have gone beyond this enhanced position consider the altruistic importance of this position of the company secretary. Hence, the major focus of the work is to consider whether this position as well as its duties and liabilities under the Nigerian corporate law are of immense value to the companies they serve. N. Danjuma[10]being an erudite scholar has made an excellent and brilliant contribution to this subject. Nkiru, noted that prior to the enactment of companies and Allied Matters Act (CAMA) 1990, both statute and common law principles did not accord to the status of the company secretary the recognition and proper position it deserves. The company secretary was regarded as a mere management clerk or servant whose position can be dispensed with like any other management staff. Both the common law and the established statutory stance[11]were not realistic and out of tune with current judicial legislative and corporate developments. In modern company practice, the secretary is an important officer, a principal officer of the company occupying a strategic position in corporate administration with extensive duties and liabilities.[12]The corporate status of the company secretary was thus enhanced by the 1948 Companies Act. This Act was the first Nigerian legislation which attempted to provide exhaustive provision for roles, duties and liabilities of the company secretary in corporate Affairs and management.

            Besides, there was no obligation on a limited liability company to have a secretary in Nigeria until 1968 when company Act was enacted.

In paper presentation by Nkiru, the learned Author, the enhanced corporate status of the secretary was put beyond doubts by the companies and Allied Matters Act 1990. This Act which commenced effectively on the 31st December 1990, even though the commencement date 2nd January 1990, replaced the twenty-two year old companies Act of 1968.

            This Act (CAMA) did not only enhance the corporate image of the secretary, but has brought some certainty into the status, duties and responsibilities of the secretary. Again, unlike the 1968 Act, a qualification standard has been stipulated for the position of a company secretary. It is compulsory for every company (especially public) to have as its secretary, a Chartered Secretary and Administrator. Legal Practitioner or Chartered Accountant, or a firm comprising persons who are so qualified. This is a striking and further re-cognition of the rising professional status of the company secretary.

            The growing scope of the secretary corporate responsibilities have made it proper and imperative that the position should not just be for any body. This is a healthy development. Also, the new Act boosted the image of the secretaries institutionally.

He Nkiru concludes thus:

“A company secretary’s position is a senior position in a private or public company organization, normally in the form of managerial position or above in some other jurisdiction, it is known as the corporate secretary. Despite the name. It is neither clerical nor a secretarial one in the usual sense”.

Hence, having a critical perusal of this work, it reveals that the Author has not clearly shown how this enhanced position has benefited the company compared to its former status and this is the focus of this work.

            J. Orojo in his book, Company Law and Practice in Nigeria stated that the status and authority of the secretary has developed with the company practice. In the early English company statutes, no provisions were made for the appointment of secretary. It was only in 1948 that the appointment of a secretary became mandatory by virtue of section 177(1), of the Company Act 1948. Accordingly, it was only in 1968 Company Act, under section 169 that the appointment of a secretary became mandatory under the Nigerian company law. Even then, neither the English Act nor the Nigerian Act spelt out the general duties of the secretary. These were left to the directors, the general meetings and sometimes, the court to determine as circumstances required. Before 1971, the attitude of the English courts was to regard the secretary as a mere servant, whose functions were prime facie “clerical and ministerial only”[13]and that his duties were of a limited and somewhat humble character. He went further to state that Lord Denning MR. had stated thus. 

“But times have changed. A company secretary is a much more important person nowadays than he was in 1887. He is an officer of the company with extensive duties and responsibilities…[14]

            He further observed that the company secretary has also been described as the administrative officer of the company and as an officer of the company with important duties and responsibilities. He concluded by stating that a new phenomenon in modern company practice arising from the growing complexities of corporate practice is the need to protect shareholders and outsider against directors who may use their position as insiders to benefit themselves at the expense of the former. It is for these reasons that views have been expressed both in United Kingdom and in Nigeria that the role of the secretary especially of a public company should be considerably strengthened as to the functions and tenure of office.

            Hence, a critical look at the above reviewed work reveals an incisive effort work commendation with regards to this subject in question. This is so because he has justified the need for the improved status but this has not been sufficiently treated and has also omitted to state these extensive duties and responsibilities of the secretary and my work expects to cover this area.

            E. Steagbade[15] remarks that within the management circle of incorporate of companies, outside of managing director and the now common, executive directors, the company secretary occupies an important and influential position in these vehicle of economic endeavours. Even though the position of the secretary had not always been regarded with sufficient respect by both the courts and law[16]. It was the courts, rather than statue that first came to reality, at the possible cost of inadequate recognition and proclaimed the true position of the modern company secretary and upheld it. Then statute finally therefore endorses the more progressive and realistic position of the courts and public in relation to the secretary and goes as far as specifying down the qualifications, duties and limitations for the office of the secretary. This was an indication of recognition of its importance. Stating further, he said, up to the not distance past, the humility with which the office of the secretary was viewed, is perhaps, not better pointed than in the often quoted dictum of Esher, MR,[17] where he said.

“A secretary is a mere servant…nor can anyone assume that statements made by him are necessary to be accepted as trustworthy without further inquiry”.

            However, he concluded that a company secretary is much more important person nowadays than he was in 1887. Hence, a careful look at this work shows that the author has not shown the changed position and what is now the value worth of a company secretary in corporate management. E. Kachikwu[18] also noted as follows:

“As to status, the incumbent has grown and developed longer and faster then the position. As to functions, the cursory attempts of embellishment have been merely cosmetic and the functions remain largely the same as they have been historically. And as duties, the position is dogged by confusion.”

He added that a review of and reflection on the historical perception and roles of secretaries inform that these classes of corporate officers have come long way. Lord Esher M.R stated the historical perception of company secretaries in Barnett Hoarse’s and Co. V. South London Tramways Co[19] Inter-alia that a secretary is a mere servant, his position is that he is to do what he is told to do and no person can assume that he has any authority to represent anything at all. Furthermore, Lord Denning[20] stated that times have changed. A company secretary is much more important person nowadays. The author also added that more specifically the recent provision in Section 295 of company and Allied Matters Decree 1990 (now Act) setting out detailed minimum qualification for company secretaries has two effects;

It ensures that secretaries are seen to be and indeed qualification of their own right.

 (b) It recognizes that the enlarged status which the company secretary has acquired over decades now compels that a company should not appoint persons where qualifications cannot match the job.

Furthermore, the Author has noted that section 295 of CAMD (now CAMA provides that only people belonging to certain professional bodies or who though not belonging to such bodies have had some minimal experience can be appointed company secretaries. Similarly, one Cursory provision which expands the status of company secretary is that contained in section 296(1) of CAMA, which removes the power of the appointment of company secretaries from the management and placed it on the board, although practical reality would favour a continuity of the old practice which was for the management to appoint a secretary and have the board confirmed it. The latest provision in the mode of appointment implies that company secretary can no longer be seen as an ordinary employee who can be dismissed by management without reference to the board. The section set out detailed provisions on the manner of removal of the incumbent. Thus although this work has shown some effect of this changed position but just like the preceding ones changed position is of benefit to the company an this is what the researcher sets out to do in this paper.

L. Grower[21] sees the company secretary as an important officer in the company. He stated that the secretary’s functions are purely ministerial and administrative. Quoting Pennincuick V.C[22] he states, so far as the position of a secretary as such is concerned it is established beyond all questions. Secretary, while performing the duties appropriate to the office of a secretary is not concerned in the management of the company…”

He also noted that the secretary was charged with the primary responsibility of ensuring that the documentation of the company is in order and despite his recognition and the statutory provision by 1948 Act,[23]the court until recently continued to treat him as a subordinate servant without ostensible authority to commit the company by his actions. Furthermore, he writes that Lord Denning Mr. stated that times have changed. A company secretary is much more important person nowadays than he was in 1887[24]. He concluded by saying that it is arguable that the secretary has also graduated as an organ of the company. Though appointed by the directors, he is not their servant but an officer of the company with substantial authority in the administrative sphere and with power and duties derived from the article and companies Act.

It should be noted from the above that the learned writer has not clearly shown the duties and functions of company secretary and how CAMA has affected this hallowed position as well as the impacts, this changed position has on the company. This author might have been affected by his locality being that the he is not a Nigerian and as such did not show the change of position as it relates to CAMA.

E. Asomugha[25] noted that a secretary maybe anything from a clerk to a supreme administrator or a secretary of state and even in junior grades. The fallacy is fast disappearing that anyone will do for the job. In upper grades, those charged with the making of secretarial appointments know that they will be lax in selective at their peril. He also painted a picture of the secretary before the CAMA 1990 as that of a mere record keeper saying that his role was equally contemptible and his duties and responsibilities were ill defined. However, he stated thus;

“The Act (CAMA

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