By Mack Yusof
There is a question that rarely gets asked openly in the boardroom, but every Company Secretary has faced it at some point.
When the Chairman and the Managing Director or Chief Executive Officer disagree, who should the Company Secretary listen to?
I have spent many years working in legal, company secretarial, and corporate governance roles. During that time, I have attended countless board meetings, prepared board papers and minutes, advised directors and management on regulatory matters, and gained a clear sense of what happens behind the boardroom formalities.
One thing I have learned is that governance is easy when everyone agrees. The real test comes when powerful people disagree.
When that happens, the Company Secretary can find themselves in an uncomfortable position. The Chairman expects support for the Board’s view, while the Managing Director expects support for Management’s. Both sides have reasonable expectations. However, the Company Secretary cannot truly belong to either side, and trying to do so would undermine the role’s purpose.
Two different jobs, easily confused
The difference between these two roles seems clear on paper. The Chairman leads the Board, ensures it works well, and oversees management. The Managing Director runs the business day to day and carries out the Board’s approved strategy.
The Malaysian Code on Corporate Governance (MCCG) is clear about keeping these roles separate. Having different people as Chairman and CEO helps promote accountability and prevents any one person from dominating boardroom discussions and decisions.
This is a good principle, but things often get more complicated in practice. The Chairman might disagree with the Managing Director about a big strategic decision. Sometimes, one side thinks an issue should go to the Board, while the other thinks it is not ready. Even smaller issues can cause tension, like when the Chairman wants a board paper presented one way and Management prefers another.
No matter the cause, the Company Secretary often ends up getting instructions from both sides at the same time, quietly wondering whose direction to follow.
Working for the company, not for a person
From my experience, the answer is neither. The role is to serve the company itself.
This is not just a nice idea; it is also what regulators expect. The Securities Commission recognises the Company Secretary’s role in supporting good disclosure and governance. The MCCG describes the Company Secretary as someone who advises the Board on its duties, corporate disclosure, and compliance with listing requirements, among other things. The Companies Commission of Malaysia gives similar guidance, making statutory, disclosure, and governance advice part of the Company Secretary’s job.
In other words, the Company Secretary’s job is not just to follow instructions. It also involves giving advice that people may not always want to hear, even to the Chairman at times.
When instructions conflict
So what should a Company Secretary do when the Chairman says one thing and the Managing Director says another? In my experience, it is more helpful to first ask whether the issue really needs to go before the Board.
If it does, the Company Secretary’s job is to bring it to the Board through the right process, with the right information, so directors can discuss and decide. If it does not, the Company Secretary should be ready to explain why, calmly and based on the facts, instead of just following the instruction of whoever is more senior or forceful.
To me, this is what separates a trusted adviser from a subordinate. A good Company Secretary does not choose sides in an argument between two powerful people. Instead, the Company Secretary’s job is to make sure the process is fair and proper. This means discussing the issue in the right setting, with all necessary information, giving directors a fair chance to share their views, and ensuring the decision is properly recorded.
Staying neutral on people, never on compliance
There is an important point to make here. A Company Secretary should stay neutral when it comes to personalities and office politics but should never be neutral about the law.
If something is required by law, speak up. If there is a disclosure obligation, mention it. If the Board is being asked to decide without enough information, point that out. If a proposed action could cause a governance problem later, raise it early instead of waiting until it becomes an issue.
Being professional does not mean staying silent just to avoid conflict. Often, the Company Secretary is the first person in the room who needs to point out a problem, even if it is uncomfortable.
Perhaps it is the reporting line that needs rethinking
One question that deserves more attention is: who should the Company Secretary actually report to?
In most organisations, the Company Secretary is an employee and part of the management structure. At the same time, they work closely with the Chairman and the Board. This setup creates a tension that companies do not always consider.
If Management controls a Company Secretary’s career progression, pay, and performance reviews, will the Company Secretary feel free to challenge Management when needed? On the other hand, if the Chairman controls the Company Secretary, will Management still see them as an independent adviser, or just as the Chairman’s representative?
I do not think there is a simple answer. However, listed companies should at least recognise this tension and design their governance with it in mind. The Company Secretary needs real access to both the Chairman and the Managing Director and must have the confidence to advise both honestly and independently. Management should not see the Company Secretary as someone who slows the business down. Good governance is not about creating obstacles, but about making sure the business operates within the right framework.
Being in the middle is the job, not a problem
Maybe we should stop seeing the Company Secretary as someone who is just “caught in the middle.” In fact, being in the middle is what the role is meant for. The Chairman needs someone who understands Management. Management needs someone who understands the Board. The Board needs someone who understands the law, the Listing Requirements, and the wider governance framework. The Company Secretary is meant to sit at this intersection by design.
It can be an uncomfortable and sometimes lonely position, but it is important. A good Company Secretary should be able to sit with the Chairman and say, respectfully, “I don’t agree,” and do the same with the Managing Director when needed. This is not because the Company Secretary outranks them, but because their responsibility is different: to protect the integrity of the process, not to choose sides. That is the real meaning of loyalty in corporate governance. Not loyalty to a particular person or office, but to the company, to the Board, and ultimately, to doing things the right way.
That is where a Company Secretary’s loyalty should start, and where it should end.
Disclaimer: The views and opinions expressed in this article are solely those of the writer, in his personal capacity, and do not reflect the views or positions of his employer(s), any organization he is affiliated or associated with, or any company named or referenced in this article.
