The power of CoSec branding: commodity or key function?

Traditionally viewed as a compliance-driven function, the question arises: will corporate secretarial (CoSec) services become a commodity or emerge as a key strategic function within large organizations?

CoSec encompasses a range of activities, such as organizing board meetings (from convening the board members, collating and circulating the board packs, drafting the meeting minutes to (e)signing), maintaining statutory and public registers and ensuring the accuracy of the corporate legal data. Historically, these were seen as routine administrative tasks. However, as businesses face increasing time and costs pressures, the perception of CoSec is shifting.

The first aspect for organizations to consider is the place of the CoSec function. While some prefer to keep full control by insourcing it, complete outsourcing to service providers is also present on the market but to a lesser extent. In our experience, co-sourcing is the generally preferred approach. While it allows to downsize or reallocate the internal talent to more complex processes, co-sourcing creates the right synergies and balance in terms of knowledge transfer, delivery and supervision.  

People or technology? A resourcing dilemma

A second and more worthy aspect nowadays is related to the type of resources deployed. The choice is between building and retaining a large team of skilled talent and automation. While there are pros and cons for each option, we will not expand on these here. However, for the CoSec service providers, the major concern is the lack of skilled talent in Luxembourg. Although they use some technology, mostly to streamline routine tasks (e.g., automation of standard documents, circulating board packs, producing first versions of meeting minutes), 60 to 70% of the work continues to be delivered or signed off “manually”. The reluctance to rely heavily on technology is mainly justified by its current underperformance. It is true that today human error and lengthy hours spent on drafting may be successfully eradicated by software solutions. However, most current Software as a Service (SaaS) platforms either require further AI development, or they perform well in one specific workflow (board meeting management, generating analytics, instant drafting of large amounts of documents or integration with accounting tools for the approval of annual accounts etc.) but are less performant or not at all developed in others. 

A strategic function in disguise

A third layer to be considered when deciding the CoSec strategy is its complementary role to other compliance functions and to the fund flows. The CoSec should be viewed as the oil that keeps the engine of the organization running. The better the oil, the more performant the engine. 

While some may argue that CoSec is less important than accounting, tax or regulatory, in practice, any business, compliance or finance decision requires an approval process managed by CoSec. In the absence of a fully integrated technology, and with an eye on the cost for such investments, the traditional CoSec service providers rely to some degree on technology, but often done in silos from the other functions. Conversely, significant integration effort is done in the space of managed services. Today, the question is no longer whether such integration is possible, but rather when it will reach a truly effective and scalable level.

CoSec services are transforming as the borders between the traditional functions vanish. The journey to a merged automated compliance function may be challenging, but the potential rewards for those who navigate this transition successfully will be significant.