Upgrading to the Corporate Governance Officer
proactive organisation is central to ensuring that boards are as effective as
possible. This is the essence of the new Corporate Governance Officer (CGO)
function that is being promoted by ILA. The "CGO = (Corporate Secretary)²,
can this equation be solved?" breakout session discussed these
“The CGO is not just a
company secretary,” said panel chair Anastasia Papageorgopoulos, Senior
Governance Officer at NATO. “They do so much more in addition to the CoSec
role, including supporting the chair to manage the board and its committees,
facilitating connections with management, animating the governance system, training
new board members and more,” she said. Taking minutes and ensuring
documentation is up-to-date and distributed on time is just part of this role.
The CGO role
“The CGO translates intention into reality,” said Raphaël Docquier, member of ILA’s board and co-chair of the Company Secretarial & Governance Officer Working Committee. “They will know how the governance system works, the constraints on this, and who are the key stakeholders. They are the link between the board and the management, and other decision-makers. As well as ensuring information provided to the board is accurate and up to date, they help formalise governance processes, solve problems, and check that decisions are implemented as agreed.”
Mr Docquier said that the CGO should not be below the management, receiving instructions from the CEO, but will be an integral part of the board’s operations. “The CGO understands the system and is able to run it independently, ensuring that information circulates as it should without interference,” he said.
Framework for action
“There is no legal framework for the CGO in Luxembourg, as is more often the case in common law jurisdictions,” said Aisling Murphy, senior associate at Allen & Overy. “Rather, there is a benefit of creating a code of conduct or roadmap for CGOs in Luxembourg, with general legal principles applying, be it employment law for staff, or contractual law for an external adviser appointed via a services contract,” she said.
The CGO is the oil in the system, but company directors retain ultimate responsibility for meetings. “Having a CGO will be very helpful for directors as it will give them extra reassurance that good corporate governance practices are being adhered to,” she said. As well, they can support the chair to ensure that discussions stay on track during meetings.
CGO in the fund industry
Some of the fund industry CGO functions were set out by Revel Wood, founding partner with One Group Solutions. “As well as the corporate secretarial function, there are tasks such as maintaining a record of potential conflicts of interest, keeping records of decisions on delegation agreements, understanding who has the power of signature in different circumstances, and ensuring that sub-committees’ work is recorded and ordered,” he said. “This is not compliance, it's not legal, it’s about helping different functions within the organisation report to the board, with this coordination managed via a structured framework.” He added that accurate records such as these are also important from a tax substance perspective.
Mr Docquier pointed to ongoing work to upgrade the existing ILA company secretarial qualification (currently 117 people have followed this training successfully) to create full-blown CGO certification. “There is work to do with the authorities and the market to explain the value added of making Luxembourg the first country in Europe to embrace the CGO concept,” he said. Ms Murphy agreed. “This will demonstrate that Luxembourg wants to be a champion of corporate governance, and this will boost the jurisdiction’s credibility,” she said.
Allen & Overy
One Group Solutions