Here are the key signs that your company secretary may not be doing their job properly.

1. Missed Deadlines and Filing Errors

One of the most fundamental duties of a company secretary is to ensure all statutory filings with the Companies Commission of Malaysia (SSM) are submitted accurately and on time. This includes the annual return and any changes to company information, such as director or shareholder updates.

• The Sign: You receive late notices or penalty letters from SSM. You might also find that documents have been rejected due to errors or omissions.

• The Risk: Late filings incur financial penalties. Persistent non-compliance can lead to the company being struck off the register, effectively ending your business. It reflects poorly on the company’s governance and can affect your ability to secure loans or investments.

2. Lack of Proactive Communication

A diligent company secretary does not just wait for instructions; they proactively advise the board on upcoming compliance requirements and governance matters. They should be your first line of defence against regulatory breaches.

• The Sign: Your secretary only acts when you chase them. They fail to remind you of upcoming Annual General Meeting (AGM) deadlines, changes in the law (like the Companies Act 2016), or new filing requirements. You often feel you are “pushing” them to get things done.

• The Risk: This reactive approach can lead to missed deadlines and uninformed decision-making by the board. As noted in a key legal case, Yee Teck Fah & Anor v Wong Ngiap Lim & Anor [2020], a company secretary must exercise reasonable diligence and skill. Failure to communicate crucial information is a failure of this duty.

3. Disorganised or Inaccessible Company Records

The company secretary is the official custodian of the company’s statutory registers and records. These include the register of members, register of charges, and minutes of meetings. These records must be accurate, up-to-date, and readily available.

• The Sign: When you or your auditor request to see the statutory records, there is a delay, or the records are incomplete and disorganised. You may find it difficult to get a clear picture of the company’s shareholding structure or past board resolutions.

• The Risk: Inaccurate records can cause significant problems during due diligence for investors or a business sale. It can also lead to disputes among shareholders, especially regarding ownership and share transfers. In the Yee Teck Fah case, the court examined the company secretary’s duty towards beneficial shareholders in the context of share transfers, highlighting the importance of precise record-keeping.

4. Poor Meeting Administration

One of the core roles of a company secretary is to organise and administer board meetings and general meetings. This includes issuing proper notices, preparing agendas, and, crucially, recording accurate minutes.

• The Sign: Meetings are called without proper notice. Agendas are unclear or non-existent. Minutes of meetings are not produced promptly after the meeting, or they fail to accurately capture the decisions made and the rationale behind them.

• The Risk: Poorly managed meetings and inadequate minutes can make board decisions legally vulnerable. If a decision is challenged in court, the minutes are the primary evidence of proper process. Without them, directors could be personally liable for decisions that appear to lack proper authorisation.

5. Offering Advice Beyond Their Expertise

While a company secretary is an expert in corporate governance and the Companies Act, they are not typically qualified to advise on commercial matters like tax planning, employment law, or industry-specific regulations. A good secretary knows the limits of their role.

• The Sign: Your secretary gives confident but incorrect advice on matters outside their scope, such as tax liabilities or the specifics of a new employment contract. Alternatively, they may fail to advise the board to seek specialist legal or professional advice when needed.

• The Risk: Relying on incorrect advice can lead to poor business decisions and significant legal or financial consequences. A company secretary’s liability generally stems from a breach of their specific statutory duties, not from the commercial outcomes of board decisions. However, if their negligence in a core secretarial task causes damage, they can be held liable.

Conclusion

Your company secretary is a vital partner in ensuring your business remains compliant and well-governed. If you recognise any of these signs, it is a clear indicator that your current arrangements may be putting your company at risk. You need a professional, proactive partner you can trust.

At Consistant Info Sdn Bhd, we understand the critical importance of flawless corporate compliance. We don’t just file forms; we provide proactive, expert guidance to keep your business on the right track. Let us handle the complexities of company secretarial work so you can focus on what you do best—growing your business.

Don’t wait for a penalty notice to take action. Contact us today at +60 11-2611 1773 to discuss how we can support your company’s success.