30 May 2023 - In the current regulatory environment, where strong corporate governance is very much in focus, it is increasingly important for companies to establish and maintain a robust corporate governance framework. As such, the role of company secretarial and board support services is crucial for regulated entities in the Cayman Islands.
The Cayman Islands Monetary Authority (CIMA) has issued a new Rule on Corporate Governance for Regulated Entities (the “Rule”), which will take effect on 14 October 2023. According to the Rule, the governing body of each regulated entity must hold regular meetings, at least annually. CIMA expects that records of the meetings should include evidence of a full agenda, circulated documents, attendee list and recorded decisions in the form of detailed meeting minutes as a minimum level of sound and prudent governance.
In conjunction with the Rule, CIMA has issued a Statement of Guidance on Corporate Governance for Mutual Funds and Private Funds. This sets out that the governing body of a regulated fund should meet more frequently than once a year – where the circumstances of size, complexity, structure, nature of business and risk profile of its operations necessitates it to do so – to enable it to fulfil its responsibilities effectively. Where necessary, the governing body of a regulated fund shall request the attendance of its service provider(s) at the meetings. The release of this Rule and Statement of Guidance makes this message timely to raise awareness on the expanded scope of CIMA’s expectations in respect of corporate governance.
A proficient company secretary will not only handle day-to-day obligations, but will also need to understand local regulatory and economic trends. Knowing how to incorporate these when developing and implementing processes to support the Board is a crucial part of the job.
It is therefore imperative that the Board support function efficiently conveys the necessary obligations with a broader understanding of the Cayman Islands’ regulatory landscape, while maintaining quality and timeliness in its delivery of fundamental tasks.
Effective Board support services generally consist of the following fundamental elements:
- Scheduling Board, Committee, and Shareholder Meetings in line with CIMA guidelines and specific fund requirements to ensure appropriate frequency of meetings;
- Coordinating meeting materials with various service providers and preparing concise notices, agendas and board packs. Ensuring the secure and timely circulation of same;
- Initiating and ensuring proper procedures for meetings;
- Provision of a Secretary for all board meetings, either in-person or via telephone;
- Provision of a meeting venue, with video conferencing facilities;
- Producing high quality official minutes and tracking action points arising at meetings to ensure compliance;
- Coordinating Directors’ signatures on documentation approved at board meetings;
- Preparing Annual General Meeting documentation, including proxies and annual returns; and
- Acting as named company secretary, if required.
Working with a global provider of Board support and company secretarial services offers entities with compliance expertise from professionals who have honed best practices from experience and constant monitoring of regulatory changes.
The Corporate team at Citco Trustees (Cayman) Limited is composed of forward-thinking, qualified professionals that are skilled at building effective relationships with Board and Committee members – helping them to navigate a smarter path forward by creating bespoke board support services. Customized solutions are designed to fit each organization and its needs to set-up an entity for success, while also ensuring that local regulatory requirements are satisfied and all obligations are attended to in a seamless fashion, carried out with the highest degree of efficiency.
By Aoife Smith, Corporate Trust Officer, Citco Trustees (Cayman) Limited