Introduction
It
has been the practice over time that the company, being an artificial person,
needs the services of natural persons as representatives in its transactions.
Given this proposition, it is obvious that these persons are of utmost
importance to the day to day working of the company. Amongst these, is the
secretary.
The
position of this life-wire of the
company has variously been questioned. Some have seen the secretary as a “mere servant”. Others have described him
as a “principal officer” of the company. This
controversy has rocked itself back and forth. The idea, presently is that the
Secretary of a company is a must have
and his duties must be carried out as such.
The
position is being consolidated by Section 295 of the Company and Allied
Matters Act, 1990, which has specifically limited the occupation of
such a hallowed office to persons with specific qualifications and experiences.
This essay, therefore, is an attempt to scrutinize the importance attached to
this office before and after the promulgation of the Company and Allied Matters
Act of 1990.
The Pre-CAMA era
As
has been seen in the introduction of this write-up, some authors, jurists,
ideologists and persons generally, have described the company secretary in many
degrading words, ranging from being a mere servant to occupying a position a
little higher than a mere clerk, etc.
The
controversy came to lime light in the case of Newlands V. National Employer’s Accident Association where
the court regarded the position of a secretary as that of a mere servant whose duties were prima facie
clerical and ministerial only. This position assumed a hallowed height and
intensity when Lord Esher resounded the idea in Barnet, Hoares and Co. V. South
London Tramways Co. thus:
“A secretary is a mere servant; his position is that he is to do what he
is told, and no person can assume that he has any authority to represent
anything at all”.
Also,
in Reuben
V. Great Fingall Consolidated Co.,
where a secretary issued a false share certificate in order to use them as
security for loan from the plaintiff, the House of Lords held that the company
was not liable for this unauthorized act of the secretary. The Lords further
held that:
“The Secretary of the Company, who is a mere servant, may be the proper hands to deliver out certificates, but
he can have no authority to guarantee the genuineness or validity of a document
which is not the deed of the company”.
This
position clearly points to the attitude, generally, of the common law towards
the position of a company’s secretary. This position may not be completely
fixed, as certain English courts attempted to dignify the position. A
positional enhancement to the office of the company secretary was done in the
case of Daimler Company Ltd. V.
Continental Tyre and Rubber Co., where the courts described him as “one
of the organs of the company”.
This
promotion doesn’t seem general enough as the early English Companies’ statutes
never made provisions for the appointment of a secretary, until Section
177(1) of the United Kingdom Companies’ Act of 1948, which mandated companies to appoint a
secretary. This 1948 provision was followed by later Companies statutes but
importance wasn’t granted such an office and duties were undefined.
A
significant revolution occurred in 1971, where Lord Denning, in Panorama
Developments (Guildford) Ltd. V. Fidelis Furnishing Fabrics Ltd., denounced the earlier position of the
company secretary (as stated in Barnett, Hoares and Co.) viz:
“…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…He
is no longer a mere clerk”.
To
compliment this idea, Salmon LJ., in the same case added
that;
“Today, not
only has the status of a company secretary been enhanced, but the state of
affairs has been recognized by statute.”
Nigerian
courts were not left out in the tide of this revolution. In Okeowo
V. Migliore, Idigbe JSC.
described a secretary as a principal
officer of the company. Also, in Adebesin
V. May and Baker Nigeria Ltd., a
secretary was described as “an
administrative officer of the company”. To cap it up, in 1987, a court saw
the secretary as “a high ranking officer
in the set up of the company who is also a part of the management of the
company”. This later position has been formally cemented by the evolution
of the Companies and Allied Matters Act of 1990.
Post-CAMA era
Sequel
to the plethora of post-1971 litigations that gave the company secretary a more
hallowed position than that of earlier common law provisions, the Companies and
Allied Matters Act 1990 codified, systematically and directly, the fact that
the company secretary is the grease that oils the machinery of the company.
Foremost, Section
567(1) of CAMA 2004 clearly describes the secretary as an officer of the company. Here, it is
noted that the contemplation of the law drafters is not farfetched form the
from the present day enormity in the nature of functions appended to the office.
Section 293 of CAMA 2004 compels every company to
have a secretary. Further, by Section 294 of the same statute,
where a person acts as both director and secretary in carrying out a statutory
directive, it shall not be deemed to have been done. Commenting on this section
of the law, Orojo points out that where anything is required or authorized to
be done by or to a director and the secretary, such a requirement or order
shall not be satisfied by the fact that it has been done by a person acting
both as director and secretary. By implication, the importance of the
secretarial position must not be covered by the cloak of another office, no
matter how hallowed.
Also,
within the Act, qualifications are outlined for the positions of the secretary
of a company. Apparently, the duties of a secretary of a company have been
clearly identified in Section 298(1) CAMA and his tenure
protected.
The
law also provides that even certain unauthorized acts of the secretary can be
further ratified by the company, making such acts binding on it. The importance
of a company secretary within the purview of the act is also seen in the manner
in which Section 296 of the Act details procedures for the appointment
and removal of a company secretary. These are not conclusive. It is obvious
that the position promulgated in the Panorama
Case has come to stay.
Conclusion
This
work has shown, clearly, that the status and authority of the secretary has
developed with company practice. Earlier, the secretary was held without
regards, respect and responsibilities. Presently, the timely intervention of
both case law and statutes has turned the office of a company secretary into a
much exalted position in company law jurisprudence. The wind of change
characterized by the Panorama Case blew across Nigerian
business and legal terrain. It is my position here that the various positions
of the Companies and Allied Matters Act 2004 which tends to further exalt the
office of the secretary of a company are merely feeding fat from the carcass of
the Panorama
decision.
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