Technology and the role of company secretaries: in a chat with Fiona Otika

Fiona Otika is the Company Secretary for Europe at Principal Global Investors, a subsidiary of Principal Financial Global Inc, a US listed company. She is the Mentoring Coordinator for the Association of Women Chartered Secretaries having retired as President in April 2019.

Fiona has an LLB in Law, is a Fellow of the ICSA and has over 10 years of experience from a number of financial institutions, including: Universities Superannuation Scheme Limited, BNP Paribas Securities Services and Octopus Investments. Her roles have included portfolios of listed and private companies across various jurisdictions.

Over recent years, how have changing regulatory environments impacted the work effort required in company secretarial functions (e.g. GDPR)?

The ever-increasing regulatory environment has expanded the scope of the work performed by company secretarial functions. The Financial Services industry has experienced the most significant regulatory changes following the financial crisis. There is no sign of this slowing down. An example is the Senior Managers & Certification Regime introduced in 2016 by the FCA in the banking sector that has now been extended to almost all regulated firms with an implementation date of December 2019.

The additional requirement to provide support to implement and oversee any continuing obligations adds increased pressure on the function. The majority of the regulations touch on different departments and provides opportunities for the function to work collaboratively with other departments.

How do you think emerging technologies such as AI and blockchain will impact the role of governance professionals in the future?

I see AI and blockchain unburdening the company secretarial function of some but not all of the administrative elements of role. It’s unlikely to happen as quickly as some would like or anticipate, as there can be challenges getting sign off for new technology (for example budget constraints). Technology also comes with its own issues and vulnerabilities.

The role of governance professionals has already changed over the past 10 -15 years. Effective AI and blockchain have the potential to further support the evolution of the role. Governance professionals could then continue to focus on more strategic matters and be leveraged as trusted advisors to the board. Greater emphasis would be placed on emotional intelligence and skills that require sound judgement that cannot be automated. This could help demonstrate more overtly the value governance professionals can add, for those willing to rise to the challenge. As the focus of the board and business often relate to added value.  

Do you think that board members fully understand the company secretary's role?

I believe some boards have a good understanding of the company secretary’s role. However, the role can vary significantly from one business to another. Factors such as the level of engagement of the company secretary can impact the board members’ understanding of the role, as well as individual board members’ experiences.

The changing role and the growing expectation of good governance globally, coupled with the work the ICSA and its members are doing, will hopefully help to improve the understanding of more than just board members but all functions and society more generally.

In your opinion, what is the main barrier to good corporate governance?

There is more than one main barrier to good corporate governance and this can vary from one business to another. I believe the primary barriers are lack of understanding, misconceptions or experience of poor execution of good governance that all result in a lack of engagement. When corporate governance is turned into a tick box exercise it can become laborious and be perceived as another hurdle designed to slow down the decision-making process without adding value. This is where having an engaged company secretary who understand the business and can be pragmatic in its application where possible can be a great facilitator rather than be seen as an obstacle to overcome.

There's a lot of talk around diversity in the boardroom, also beyond gender. What are your thoughts on this?

Diversity in the boardroom has been a hot topic for some time and I am disappointed in how long progress is taking. I am an advocate for diversity irrespective of the category, and I see it as fundamental in this ever changing and globalised world. I have previously been averse to the use of quotas but seeing the challenges we have had with gender diversity not just at board level but the c-suite over the decades, I do on occasion find myself questioning whether it may be the only way to progress things. Controversial, I know, but I find it hard to believe that diverse talent isn’t out there, so the meritocracy argument shouldn’t be the big issue it can be made out to be. It may in the interim be the only way to really move the needle on diversity in the boardroom.

Expectations of society are changing, and businesses that are focused on diversity are having their reputations enhanced. In promoting inclusivity, they are reaping the benefits of attracting a broader range of talent which brings greater creativity and innovation.

It is clear more work is needed to develop talent across all levels in businesses and by developing diverse talent more role models that reflect the society we live in are created.

You can follow Fiona on Linkedin.