ABBD3013

FUNDAMENTALS OF CORPORATE ADMINISTRATION

INTRODUCTION TO CORPORATE
ADMINISTRATION
Prepared by:
Hisham Hanapi
0176543454
hishamhanapi@gmail.com

DEFINITIONS OF CORPORATE
ADMINISTRATIONS
Administration: the management of the affairs of an
organisation.
Henri Fayol (French mining engineer who developed a general
theory of business administration):
Management = Planning, organising, commanding, coordinating
and controlling.
Dictionaries - administration = the management of the affairs of
the organisation.
Administration in the context of management: A specialist
branch of management.

DEFINITIONS (CONTD)
Mary Parker Follet (pioneer theorist on management theory):
management = getting things done by other people.
Rosemary Stewart (pioneer theorist on management theory):
management = deciding what is to be done and getting others to
do it.
This approach emphasises the importance of the human
element of work.
Henry Mintzberg (an internationally renowned academic and
author on business and management):
Communication within management Informational Role

WHO ARE CORPORATE

ADMINISTRATORS?
Corporate administrators are:
Mediators between the company, its board of directors,
stakeholders, government and regulatory authorities.
Professionals, who have expertise in corporate laws,
capital markets, security laws and corporate governance.
Advisors of the Board of Directors (BOD) on the kind
of practices to be adopted in corporate governance.

Is corporate administrator a
lawyer?

ROLES AND FUNCTIONS OF

CORPORATE ADMINISTRATORS
To ensure the well-being and growth of the company, its BODs and all
stakeholders and that best management practices and work ethics
are followed.
Roles: A mixture of legal, quasi-legal, and managerial.
1. Legal responsibilities: defined in corporate law, specifically with
regard to the matters spelled out for chartered secretaries under
the Malaysian Companies Act 1965.
2. Quasi-legal obligation: arises in his capacity as corporate
advisor and assistant to the BOD.
3. Managerial role: emerges when he is entrusted to look into
specific issues, or undertake specific assignments.

ANNUAL GENERAL MEETING

(AGM)
S. 143 of the Companies Act 1965 (CA 1965)
It is mandatory for every company to hold an AGM once every calendar
year: s.143(1)
The responsibility of convening the AGM usually rests with the directors.
Purpose:o Provides opportunity to members to monitor, supervise & question the
directors on matters relating to the operation of the company.
o Gives a chance for members to pass resolutions through voting in matters
relating to the company.
Failure to hold an AGM is an offence : s.143(4)(a)

ARTICLES OF ASSOCIATIONS
(AOA)
Provisions that regulate the internal management and operation of
the company. For instance:
o the relationship between the general meeting of shareholders
and board of directors
o
the method of appointment of directors
o
the procedure at meetings of the company
o
the procedure for allotment and transfer of shares
o
the respective rights and obligations of members
Memorandum of Associations (MOA) basic constitutional of the
company. Content of MOA see S. 18 of CA 1965.

CORPORATE GOVERNANCE
Corporate governance is a term that refers broadly to the rules, processes, or
laws by which businesses are operated, regulated, and controlled.
Well-defined and enforced corporate governance provides a structure that, at
least in theory, works for the benefit of everyone concerned by ensuring that the
enterprise adheres to accepted ethical standards and best practices as well as to
formal laws.
Best practice Continuous process of learning, feedback, reflection and analysis
of what works (or does not work) and why.
In recent years, corporate governance has received increased attention because
of high-profile scandals involving abuse of corporate power and, in some cases,
alleged criminal activity by corporate officers. An integral part of an effective
corporate governance regime includes provisions for civil or criminal prosecution
of individuals who conduct unethical or illegal acts in the name of the enterprise.

DUTIES AND RESPONSIBILITIES

OF CORPORATE
ADMINISTRATORS

Chartered secretaries are neither primarily organizational

strategists nor functional (operational) specialists.

BUT THEY perform roles that assist the organizational

strategists and facilitate functional specialists in discharging
their respective responsibilities.
Roles of chartered secretaries or administrators are specified
by:
1. the statutes,
2. their board of directors and top management, and
3. their organization.

THE SOURCES AND APPLICATION

OF GUIDES TO BEST PRACTICE
The ICSA website
1.

www.icsa.org.uk

2. www.maicsa.org.my

DUTIES AND RESPONSIBILITIES

OF CORPORATE
ADMINISTRATORS

The ICSA (1998): chartered secretaries have two kinds of duties:

Core and Additional.

1. Core duties: legal obligations (specified by various Acts such

as the Malaysian Companies Act 1965) and consequent offences

and those which result from best practice.
.

However, the additional duties tend to take a substantial

amount of the chartered secretaries time .

The actual duties undertaken also depend on the personal

capabilities, previous work experience, and academic background
of the secretary concerned.

DUTIES AND RESPONSIBILITIES

OF CORPORATE
ADMINISTRATORS

Board and Committee Meetings

Ensures smooth operation of the corporate meetings.
Determines the agenda of meetings.
Gives notice to directors and commitees.
Must be knowledgeable in corporate, legal and regulatory
matters since they are frequently called during meetings.
Drafts and distributes minutes.
Ensures meetings follow certain set of rules.

BOARD AND COMMITTEE

MEETINGS
Agenda Formalized plan of what topics are to be addressed
during the meeting, the time allotted for each topic and
appropriate actions that can be taken during each meeting
segment.
Leadership The chairperson of the board is typically an
experienced, senior member of the board, and should be well
versed in parliamentary procedures.
Minutes A written record of the meetings themselves, a hard
copy of everything said and all business discussed. These minutes
are important not only for future meetings, when accurate
information from previous meetings might be necessary, but also to
establish corporate accountability.

BOARD AND COMMITTEE

MEETINGS
Motions - A member makes a proposal, or motion, and the other members
of the board vote. If it garners enough votes, the motion passes and is
entered into the minutes for future implementation. If not, it is still entered
into the minutes as old business. In the event that all members aren't in
attendance, the quorum, or minimum number of attending members to
proceed with business, may still vote on motions and resolutions. The only
exception is if the minimum number of members required by the quorum is
not in attendance.
Majority Rule - All major decisions by the board must be approved by at
least a majority of board members. In some boards, the vote must be
unanimous, or unanimous with dissenters abstaining. In this way, the board
can't be dominated by a single member, but rather is a collective effort, with
the individual rights of the members protected.

DUTIES AND RESPONSIBILITIES

OF CORPORATE
ADMINISTRATORS

Annual Meeting of Shareholders

Prepares and distributes proxy statement and notice of meetings.
Prepares and distributes annual reports.
Negotiates with shareholders regarding their proposals
Helps directors and management prepare to respond to
shareholder questions at the meeting by creating briefing
materials and alerting directors and management to "hot-button"
issues,
Solicits proxies to achieve quorum and tabulates votes

 Corporate Records
knows what documents and records need to be created and
what matters they should, or should not, contain.
Maintains records (protection, filing, access, arrangements) in
accordance with law.
understands the significance and substance of a wide variety of
matters, and may need to develop procedures to assure the
accuracy of many different types of documents
Maintain records of the subsidiary companies.

 Stock Transfer
Maintains shareholder records, and providing for the transfer or replacement
of stock certificates.
In most major corporations, however, this function is handled by a separate
unit or by an outside transfer agent, with the Corporate Secretary acting as
the corporate liaison.
Securities Markets
serves as the corporate liaison with the various securities markets on which
the company's shares are listed.
Assures corporate compliance with stock market requirements.
Prepares listing or other market agreements, notices, and other documents
and reports which the corporation must send to various securities exchanges
or markets

 Director, Officer, and Shareholder Concerns

the administrator is a central person to whom directors, officers
and shareholders turn for practical assistance as well as guidance.
Towards Directors - primary liaison between the corporation's
directors and management
Towards Officers - Provides services to senior officers similar to
those provided to directors
Towards Shareholders - the principal corporate contact for most
shareholders, and may be able to influence how shareholders view
management's responsiveness.

CORPORATE ADMINISTRATION ACTS AS

SUPPORT SERVICES OF ORGANISATIONS
Based on the preceding explanation, one can understand the
significance of the supportive role that corporate
administration provides to an organization.
Such corporate support function is crucial when traditional
organizations do not create a particular profession to undertake
that responsibility.
Chartered secretaryship or administration has moved forward to
undertake such a role for decades.

CONCLUSION
1. The manager/administrator must share with the directors a view of
the organisations mission and strategy.
2. A senior corporate administrator will have wide responsibility
and authority to plan, organize and control the work of others in the
organization.
3. He must manage information systems that ensure that manager
have the essential information they need to direct the
organisation lawfully, ethically, effectively and efficiently.
4. He must help the organisation achieves its objective, maximises
its success, and attains competitive advantage by seeking best
practice and ensuring smooth running of internal affairs of the
organisation.

5. Administrators must ensure that their management approach is

consistent with the complexity and turbulence of the business
environment.
6. An administrator must help the directors to avoid negative
consequences for organisations.
7. Corporate administrators are likely to be involved in ensuring that
systems are in place to meet the need to demonstrate
adequate performance.
8. He is required to interpret and apply the guides according to
specific circumstances encountered in the organisation.