The empowered corporate secretary.

• Author: KOPPES, RICHARD H.

Here are the important objectives that are achieved by designating the corporate secretary as the formal corporate governance officer of the company.

CORPORATE GOVERNANCE activism has come into its own in the last decade to become a force to be reckoned with in the modern corporate world. It has been a guiding star for many efforts, especially over the last decade in America, to improve quality and operations of our markets and industries. There have been many market initiatives in the corporate governance field by ambitious investors, in particular U.S. institutional investors and some individual companies, who have been dedicated to making sound governance a genuine part of the corporate culture.

A number of market forces have driven companies and directors to reassess the nature of corporate governance systems worldwide and have propelled dramatic change in how boards are structured and function. First, there has been a movement toward a more integrated global market economy, resulting in ever more intense market competition in all markets. Second, there has been a remarkable growth in stock ownership by institutional investors, especially those of public and private pension funds. These forces won't reverse themselves, and together with rapid technological innovation can be expected to continue to produce pressure for change in management practices, organization structures, and corporate governance.

Role change

It is a well-known fact that the new regulatory environment and the demands placed on directors have dramatically changed the role of a corporate secretary. Today, corporate secretaries are being asked to assume more responsibility, to support board members in new and different ways, and to exercise greater powers than ever before. Board retirement, board orientation and training, board agendas, committee activities, and supporting the chairperson or the lead director are all tasks associated with a corporate secretary's job. In effect, corporate secretaries are currently handling the governance monitoring tasks in many companies. We think it is important to formalize the governance responsibilities of their jobs by empowering them to become missionaries of good governance and making them the corporate governance officer of the company.

Some corporations have gone so far as to formally create a position for corporate governance. Pfizer Inc., for example, has instituted a vice president for corporate governance. Peggy Foran (who...