THE COMPANY SECRETARY
vs
THE COMPLIANCE OFFICER:
CAN IT BE ONE PERSON?
Drivers for this practice
• FAIS and Collective Investment Schemes Control Act –
Compliance Officer with certain qualifications and 3 years
financial experience
• Board Notice 158 of 2014 for Insurance Companies - Head of
Compliance
• Pension Funds Act – Monitoring Person
• FICA – Money Laundering Risk Officer
• POPI – Information Officer and
Deputy Information Officer
• Competition Act – Murray & Roberts and
Aveng have made dedicated
appointments in the last few years
Compliance requirements
• Compliance is the adherence to relevant laws and
regulations, company internal policies and procedures
• Business needs to be made aware of the laws and
requirements in their surrounding business environment
• Ignorance, non-adherence and negligence can result in
fines, penalties, reputational damage and loss of jobs
• Compliance functions assist in managing compliance
requirements through policies, procedures and practices
• Avoid risk of non-compliance situation
Responsibility for compliance
• King III – Role of the Board:
 Must approve compliance policy
 Annually: assess the extent to which the company is
managing its compliance
 Usually delegated to Audit & Risk Committee
• King III – Role of Management:
 Day to day compliance management
• Compliance Officer should ideally be:
 Independent group functionary
 View: reporting to Chief Financial Officer
 View: should not be/report to the Head of Legal
Role of the compliance officer
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Setting standards
Providing advice
Monitoring
Maintaining external relations
Resolving issues of non-compliance
Training
Assisting with ad- hoc
investigations
The compliance function
Phase I
Identification
Management
Remedial Action
Understand your
business
Identify all applicable
legislation
Phase II
Assessment:
Reporting
Categorise
Review Process
Prioritise
Phase IV Formalised
Monitoring
Pilot
Phase III Risk
Management
Risk Management Plans
Control Measures
Assign Responsibilities
Classify
The company secretarial role
• Companies Act, King III and JSE Listings Requirements
• Provide directors with guidance on their duties,
responsibilities and powers
• Make directors aware of any law relevant to or affecting the
company
• Preparing board papers, taking accurate minutes and
conveying action items
• Significant role in advising on and implementing King III
recommendations: tremendous value-add to the company
which needs to be viewed more seriously
Common elements of both roles
• Often similar qualifications in law – ideal cohesion between
roles
• Responsibility for ensuring that King III recommendations
relating to compliance are applied
• Interact with the Board and have the ability to generate active
engagement from directorate
• Able to view compliance from a strategic perspective and make
meaningful recommendations about compliance policies
Caveats around combining the roles
• Each position requires adequate resourcing: consider the size
and complexity of the company
• Compliance is a component of risk management and needs to
be performed accordingly
• Company secretaries have different skills and approach
challenges differently
• The compliance function requires detailed, operational
knowledge of all relevant legislation
• Company secretary has an important role
in using governance practices to
assist the company which you may lose
Recommendations
• Financial services – do not consider it at all
• Other industries - proceed with caution
• Ensure that compliance function is adequately catered for
and managed from a risk perspective
• Consider your resources and be very disciplined in how you
manage and delegate your responsibilities, as you will still be
held accountable
Special considerations
• Tiger Brands company secretary was disciplined for failing to
make the Board aware of non-compliance with the Competition
Act
• If your role as company secretary fulfils the requirements of a
Prescribed Officer, you will have the same fiduciary
responsibilities as a member of the Board
Resources:
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Certificate in Compliance Management, University of Johannesburg, 2015
King Report for Corporate Governance, 2009 (King III)
Compliance Institute of South Africa, www.compliancesa.com
Fin24 archives, www.fin24.com/Business/Tiger-Brands-disciplines -execs20080926
• LinkedIn Job search, www.linkedin.com
• Aveng Limited, www.aveng.co.za
• Murray & Roberts Holdings Limited, www.murrob.com