A director and a secretary are vital members of a corporation and are responsible for the efficient operation of the organization. After forming your firm, you must know all of its members, including their positions and obligations, especially the director and secretary.
Good governance and board effectiveness are more important than ever for both large and small firms. The company, not the firm’s shareholders, is a director’s primary obligation. The company is a separate legal entity and like any other individual, it has rights and responsibilities. It’s crucial to note that a corporation is not the same as its shareholders, which is why it’s critical to know what a director’s responsibilities are and where they fall.
The director must be involved in the founding of the firm in Latvia. The director’s responsibilities are usually outlined in the company’s articles of incorporation. According to Latvian Commercial Law, a company’s director is responsible for managing and ensuring the company’s operational flow, as well as maintaining financial balance and making financial decisions such as tax payments. Any Latvian firm’s director must be loyal to the company and follow the rules laid forth by the shareholders during general meetings. Directors in Latvia are not allowed to form partnerships with third parties in enterprises that compete with the firm they manage, nor may they conduct business in the same field as the company they work for or perform the same obligations in many companies at the same time. The director also has the responsibility of not divulging any firm secrets.
He or she must act in the best interests of the company and be obedient to the company’s constitution. The director must exercise powers for legal purposes only and no selfish or personal use of the company’s advantage. He or she must have regard for employees, maintain the company’s positive image and nurture profitable relationships with customers and suppliers. Basic roles of a company director include:
- developing the company’s short- and long-term strategies
- continuous implementation and achievement of the established financial plan of the company
- creating and approving new profit-generating prospects
- inspecting the company’s procedure compliance
- attending significant business meetings and negotiations on behalf of the company.
Company secretaries are no longer considered clerks who transport files up and down the halls with no understanding of how the business operates. Anyone who has the potential to become a corporate director can be the secretary. A secretary should have a broad understanding of the governance structure and ensure that policies and processes are well recorded. The company secretary’s responsibilities include giving advice to the board and ensuring the company remains legally compliant, staying up to date with legislation and being aware of shareholders’ rights and responsibilities, keeping the board up to date on changes in regulations, ensuring accounts are correctly maintained, filing annual returns, interacting with Revenue and the company registrations office, keeping meeting minutes, transferring shares, and keeping corporate records. A corporation secretary’s other responsibilities include:
- signing the annual report of the corporation
- creating statutory declarations
- guiding the chairman and the board to ensure they are operating under rules and regulations
- supporting effective communication among the board of directors, committees, and shareholders
- approving financial figures for inclusion in the company’s annual report
- taking charge of the company’s management and dealing with outside authorities and experts such as lawyers and auditors
- Developing and supervising procedures to guarantee that the organization complies with all applicable codes, as well as its legal and statutory obligations
Finally, in addition to being a legal requirement, the secretary’s function is critical to the board’s effective administration. It is a position of great trust, and it should be filled by someone trustworthy and capable of completing the different responsibilities that come with the job.