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The Corporate Secretary

The term «Corporate Secretary» is established by the Law «On Joint Stock Companies». It wasn’t established by the law before, but it was widely used in the acts of SEC.

The corporate secretary is appointed by the supervisory board on the proposal of Chairman of the Supervisory Board according to the article 56 of the Law.  The corporate secretary is responsible for co-operation of a JSC with the shareholders and / or investors. The Corporate secretary’s job is paid from the general budget of the supervisory board.

According to the article 51 of the Law in case of absence of the Supervisory Board its power is realized by the general meeting. So, the corporate secretary is elected by the general meeting in case of absence of the supervisory board in the company. The law doesn’t interdict transferring this power to the executive Body of the company.

It is established in the article 78 of the Law that corporate secretary (if he is appointed) gives copies of documents of the company to shareholders.

In general, it is all that was established by the law about the corporate secretary. Some more information is indicated in acts of the SEC, which were approved before the adoption of the new law.

According to the Principles of corporate management, approved by the decision of the SEC on 11 of December 2003 № 571, the main tasks of the corporate secretary are:

- preparation and conducting of the general shareholders meeting, meeting of the supervisory board and executive body;

- giving timely and authentic information about the company to the bodies of the company and  shareholders;

- storage of documents of the company including the company’s archive;

- communication with shareholders, including giving explanation of their rights to them, investigation of shareholders’ appeals for violation of their rights;

- giving conclusions to the bodies of the company and making proposals for bringing the internal documents in conformity with the principles of corporate governance.

The functions of the secretary of the general meeting, supervisory board and executive body are also recommended to refer to the power of corporate secretary.

So, corporate secretary is a person, who is responsible for company’s cooperation with shareholders, and cooperation of bodies of the company with each other, as well as is responsible for improvement of corporate governance. He is responsible for communication with the company, shareholders, other interested persons and with bodies of the company. It is an information centre of a JSC in a global sense, where is accumulated a considerable amount of information about the company. Moreover, a corporate secretary provides improvement of corporate governance.

The SEC determines requirements of the corporate secretary quite laconically: such as the corporate Secretary should have knowledge required for discharging of his duties, impeccable reputation and enjoys shareholder’s confidence.

The Corporate Secretary can have a different legal status. He can be an employee or a person who works under the civil contract. The law allows both.

Many Lawyers think about advantage of corporate secretaries - lawyers who works with the company under the civil contract. Such option completely satisfies requirements that are set to the SEC and has several advantages. Lawyers should have necessary knowledge by definition, should have the required experience, good reputation, and can enjoy shareholder’s confidence.

Also there are some advantages. In particular, the lawyer can be independent of the executive body of the company, as far as a labor contract wasn’t concluded. The professional rights and guarantees of their activity are set to the lawyers, which additionally can be used. Also, lawyer must keep the lawyer’s secret, which also spreads to his activities as a corporate secretary. Documents related to discharging of his duties, can be inspect, disclosure or withdrawal without his consent, including documents that a lawyer can keep as corporate secretary.

In any case, introduction an office of the corporate secretary is a positive factor for the JSC. It will help make exchanging of information in the company better as well as avoiding conflicts among the shareholders.

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