Under the Companies Act 2006 private groups or companies are not required to appoint a Company Secretary. However, in June 2018 the Government introduced secondary legislation requiring private companies of a significant size to disclose their corporate governance arrangements in their directors’ report and on their website, including whether they follow a formal code.
This new reporting requirement, the Wates Corporate Governance Principles for Large Private Groups or Companies applies to all companies that satisfy either or both of the following conditions: more than 2,000 employees; a turnover of more than £200 million, and a balance sheet of more than £2 billion.
The requirements are based on 6 principles:
Purpose and Leadership
Opportunity and Risk
Stakeholder Relationships and Engagement
Companies that are subject to an existing corporate governance reporting requirement are exempt.
Considering the above, most private companies of any reasonable size not only have a Company Secretary but a team behind them. Without this kind of support the functions and responsibilities of the role would fall to the Directors of the company.
It is easy to forget that some of our household name companies are private, for example John Lewis, Virgin Atlantic, JCB and Dyson to name a few. It is inconceivable that companies of this size and visibility would be able to operate without a governance framework.
The Wates Principles offer all companies that are not subject to a formal corporate governance code an opportunity to consider their approach to governance and aspire to meet the Principles. The Wates Principles offer companies, even those not subject to the regulation, an opportunity to demonstrate good practice.
Generally private groups can be held accountable to specific regulators and utilise the skills of company secretaries to administrate the group in line with those regulations, other groups may have complex structures which require detailed management and administration.
Boards and Committees are ever present in any organisation and a strong secretariat team can ensure that best governance practice is followed, and all reporting can be done to the highest standards. Qualified governance staff can also provide strong counsel to the board alongside any internal or external legal staff.
The variety of work that falls into the remit of a company secretary in this sector is huge and the departmental structures are also extremely varied. If a private company appeals to you then we will be happy to give you further guidance.
For more information on the Wates Corporate Governance Principles for large Private Companies please go to https://www.frc.org.uk