Examiners Report for Corporate Secretaryship: May 2010

GENERAL
As mentioned by many examiners before, it remains an issue that candidates are not
able to identify the core issues and succinctly provide a well thought through answer.
The stressful exam conditions clearly play a role, but such environment is not necessarily
that different from the difficult and stressful environments in which company
secretaries often have to operate in many cases having to provide opinions on their
feet and having to be able to provide clear, but to-the-point views on the scenarios very
similar to those portrayed in the paper.
Many students still do not present answers in the requested format. Company
secretaries are often requested to present opinions in a specific format and the first
impression of a memo / report / policy often contributes to the perceived image of the
quality of the work, as well as the quality / skills / expertise of the individual. The
questions are therefore asked in such formats not only to give students a few
discretionary marks if the basic skill can be displayed, but to entrench the skill to enable
the students to be more effective in practice.
This was a very reasonable and very practical paper, yet in many instances very poorly
answered. Having read some of the answers given by students, it is apparent that
students are not engaging with the study material in sufficient depth..
All of the questions dealt with aspects that involve the company secretary on a regular
basis and none were of a very ad hoc nature (possibly like mergers and acquisitions,
share buy-backs and the like) employee share schemes are very popular, round robin
resolutions are used on a daily basis, dividends are in many instances paid twice a year,
statutory registers are dealt with daily, etc, thus none of these questions were
unreasonable when looking at the daily tasks of a company secretary. The only question
where the answer had not been fully covered in the study material was that of question
3.1 and if a little logic was applied, it was still easy to answer. Students have to realise
that that this is a board level exam and they have to be able to summarise and
succinctly apply what they have studied if they have not studied sufficiently, they will
not pass.
It seems that students still confuse basic principles referring to listing requirements
when a question clearly refers to a private company, etc. These are the MOST basic
principles without an understanding of which one cannot progress to more complex
issues the first aspect of the question is analysed incorrectly, all of the remaining issues
would be incorrect as well.
As in previous exams, students spent too much time on question 1 - the length/detail of
the answer has to somehow correlate with the allocated marks so for 4 marks about
half a page or 15 lines should be adequate. Where a question is worth 20 marks, three
to four pages would be the norm. Many students also spent too much time on non
value-adding information, again affecting their ability to answer all questions within
the allocated time lengthy answers are not required, as long as the critical aspects are

dealt with. Often the shorter/succinct answers received better marks as they not only
covered the crux, but showed that the student could ascertain what the really important
issues were.
It is clear that students focused on the meeting process / protocol (board and
shareholders) and tried to squeeze this into any possible answer, whether appropriate
or not. While meeting process is an important aspect of the job, you cannot be a newage, value-adding, advisory company secretary if this is the only process you really know
how to tackle. If the question doesnt specifically deal with, for example, planning and
process for a meeting then dont try to force it into your answer thinking that marks will
be allocated for it.
Handwriting was extremely poor. Students have to realise that where an examiner
must first try to decipher what has been said, it is very easy to misread / misinterpret an
answer.
Spelling was quite poor in many instances, which is a concern; because despite our
dependence on spell-check, company secretaries are often requested to for example,
write on flip charts etc and poor spelling definitely does not convey a professional
impression. In cases where spelling was very poor, it was also often indicative of poor
writing in general, which is a serious concern for company secretaries as writing, be it
minutes, reports, opinions etc., is a huge portion of our daily responsibilities. Students,
especially at board level, should make all endeavours to address such deficiency as,
improving their writing skills, will only stand them in good stead going forward.
Question 1
Question 1.1 was very poorly answered.
Question 1.2 many students confused the fit and proper declaration with a general
declaration of interest no marks were given for general declaration answers.
Question 1.3 Many students discussed the physical lifting of hands versus the
ticking of a ballot. Many students had no idea what the difference was. The company
secretary plays a very important role in this process and should have a proper
understanding of it.
Question 1.4 Resolutions are a critical aspect of the company secretarys role and
students could not explain what the purpose of a resolution is. Most students could
explain the types and requirements, although many students believe that an ordinary
resolution is one that only occurs at a board meeting and a special resolution one that
only occurs at a general meeting.
Question 1.5 Very few students could name four classes of shares. How will you as
company secretary be able to advise the board on the most appropriate format for a
transaction if you are not aware of the standard types of shares that could be used?

Question 1.6 Again an important responsibility of the company secretary and

misunderstood by students.
Question 1.7 Most students merely referred to the definition in the Act, for which
some marks were awarded, but very few students knew the full requirements.
Question 1.8 This question was very poorly answered and many students had no idea
what the capital clause referred to this is again a basic principle, like types of
companies that MUST be understood. Many students confused this with the capital
maintenance rule / capital adequacy / solvency and liquidity test.
Question 1.9 Although many students understood this concept, an equal number had
no idea what a round robin / written resolution is this is something that a company
secretary deals with on a daily basis. In many instances where a student had correctly
described the principle, they incorrectly indicated the legal requirements.
Question 1.10 Just giving a yes or no answer to a question like this is not sufficient
one has to substantiate the answer to get full marks. Many students confused the fact
that the individual was a public officer with the condition that a secretary or bookkeeper
in a private company can be appointed as auditor despite being an officer of the
company which was not applicable in this case. For a 3 mark question, when you are
asked what must be done on appointment of the new auditor, it clearly just requires a
brief answer of the statutory submissions after appointment (for 2 marks) and not a 3
page explanation of agenda for meeting, notice of meeting, resolve to appoint, or other
items..
Question 2
Many students had no idea what statutory registers are and explained all records that a
company is required to keep i.e. financial records, memorandum and articles etc.
Many others wrote about anything they knew with regard to statutory submissions and
requirements i.e. annual returns etc. This is a very important aspect of the company
secretarys role and critical for students to have a good knowledge of the relevant
requirement, etc.

Question 3
Part 1 of the question was fairly well answered, although certain students list of
questions included questions that one would ask internally and not for advice from the
consulting auditing firm (i.e. What will the name of the company be? compared to a
question that would be reasonable to ask the firm, like what are the requirements for
company names in Botswana?), but half marks were given if the question was deemed
at least partly reasonable. Although a certain number of general questions were
allowed and given marks, at least 70% of questions had to be company secretarial /
corporate law related in order to obtain marks as company secretary you are asked to
play a role according to your field of expertise and although general input is admirable,
if you do not look after the critical areas within your scope (i.e. getting the company
properly and legally registered in the first place), nobody else will, whereas there will be
general managers that will also worry about where the skills will come from, where
youre sell your goods and how you will transport them, etc.
Part 2 was average: many students remembered some of the principles, but forgot a
few. Some students clearly had no idea what the 7 principles were and wrote anything
and everything they knew about corporate governance or anything they could
remember about King II.
Question 4
Students generally failed to give sufficient information to receive high marks and
focused too much on the pre work, developing and deciding which scheme, whereas
the question didnt ask for an overview of schemes at all, but rather about the
administration thereof. Very few students captured the JSE requirements, which was a
critical aspect in this question.
No student effectively dealt with ad hoc events it is not good enough to merely state
that the company secretary should deal with ad hoc events.
Question 5
This was an easy question in that there were very few right or wrong answers as long
as the charter looked and read like a charter and students tried to emphasise the more
important / relevant principles, as well as not state anything contradictory to the Act /
deemed best practice.
It was clear that most students definitely had not looked at the board charter example
which is an annexure to the study material. The annexures are there for a reason and it
does not mean that because material is contained in an annexure instead of the main
text that it is of lesser importance. Board charters are critical and in most instances
prepared by the company secretary. Many students clearly had no idea what kind of
principles should be contained in a board charter and how it should read, therefore
many submissions really did not resemble a charter at all.
Some students reiterated the same things in a number of different ways as 6 different
principles. Board charters can sometimes get quite lengthy, so if the question
specifically limits you to a few principles, you should choose the most important /

critical ones give the critical information to get the marks! Ideally try and show your
knowledge of the Act and King II in the process over elaboration.
Question 6
This question was generally poorly answered. Students dwelled for pages on the notice,
agenda, special resolutions, meeting venue being big enough, scrutineers, minutes etc
etc during / through which the dividend is being declared. Firstly, this was not relevant
at all and secondly in most instances where students dwelled on or explained this
process they were often incorrect confusing special resolutions with ordinary ones,
confusing board and shareholder meetings etc..
Very few students explained on what grounds a dividend decision should be made (i.e.
consulting the financial statements / management accounts in the case of a private
company), the record date, and only a handful referred to dividend mandates.

END OF REPORT