One morning on a packed commuter train, I was doing my usual Duolingo routine—French for the West Africa trip I might take again, German to revive whatever is left from my student days, Chinese which has stubbornly refused to stick for over 30 years, and Korean which sticks even less—when something on the phone of the young woman next to me caught my eye.
She was reading an article about Corporate Secretaries.
Yes, Corporate Secretaries.
Apparently, there’s a growing discussion in Japan about adopting the Western-style system and qualification framework to strengthen corporate governance.
A fund is more than a legal shell.
Governance lives in its decisions.
Now, the fact that I absorbed all of that in a split second would probably earn me a “creepy” label from most people—including the poor woman whose screen I unintentionally scanned. But let’s just say this: even an aging man with worsening presbyopia can instantly lock onto information he cares about. Human information‑seeking instincts are impressive. I’ll leave it at that, before this turns into a completely different article.
My Recent Theme: Why Corporate Secretaries Matter in Fund Governance
The Corporate Secretary—once translated in Japan as kaisha chokushiyaku, a term from another era—is something I increasingly recommend as part of the governance setup when establishing Cayman‑domiciled funds. Based on real experience, I’ve seen how essential the function is.
But explaining its value in Japan is… difficult.
Especially for people who see funds merely as
“money‑gathering machines” or “containers for investment.”
Ironically, these are often the same people who debate governance at their portfolio companies without realizing the symmetry.
In moments like that, I feel more aligned with the “conscientious young woman” on the train than with the industry veterans.
In any case, if a concept doesn’t exist in this country, then let’s introduce it.
That’s what Break the Border is about.
So let’s walk through what a Corporate Secretary actually does, how it fits into fund operations, and why it matters.
A company—or a fund—is just a legal shell without ongoing obligations
Before we even get to funds, let’s start with something familiar.
Many people assume that once you:
- draft the Articles of Incorporation (or a partnership agreement),
- sign it,
- and complete the registration at the legal affairs bureau,
the job is done.
But of course, that’s only the beginning.
Once the registration is complete, you still need to:
- file notifications with the tax office,
- take your freshly printed registry certificate to the bank to open an account,
- register employees for social insurance and labor insurance,
- deal with the pension office, Hello Work, the labor standards office,
- and even the metropolitan tax office.
And it doesn’t end there. All these filings create ongoing obligations. You must maintain them. In other words: compliance—everyone’s favorite word.
Wait, why are we suddenly talking about compliance?
Some people in finance seem to believe:
“We’re in the fund business, so as long as we follow the Financial Instruments and Exchange Act, we’re fine.”
If only it were that simple.
The world is built on layers of laws. If you operate any kind of business, you must comply with all the laws that apply to it— not just the ones you personally find relevant.
For example:
- industry‑specific regulations,
- personal data protection laws,
- labor laws,
- tax laws, and so on.
And who handles all of this inside a company?
Usually the least flashy, least celebrated, but most reliable people: the General Affairs team or the HR/Labor team.
But why them?
How a company is actually structured
Because the Board of Directors decides:
- what departments exist,
- what authority they have,
- and what responsibilities they carry.
In a tiny company—like a freshly formed startup or even my own Slowsteps— you don’t create a “Department of This” and “Department of That.” You simply ask: “Who can do what?” and you divide the work accordingly.
But as the organization grows, that stops working. You need clarity:
- Who has authority?
- Who is accountable?
- Who represents the company externally?
This is where governance begins.
“Who’s the boss? Step forward.”
The members of the Board are chosen by the shareholders. And the authority of the Board is defined by the Companies Act.
In other words, a company operates within a legal framework:
- shareholders appoint directors,
- directors make decisions through the Board,
- departments execute those decisions,
- and the company generates revenue through repeatable processes.
So governance is ultimately about:
How transparent and reproducible the company’s decision‑making is for the ultimate economic beneficiaries—its shareholders.
This is why debates like “Half the board should be women” for the listed companies are not the core of governance itself. (Important socially, yes. But not the structural essence.)
Enter the Corporate Secretary (or, if you’re from another era, the “company envoy”)
Within this legal framework, someone must ensure that:
- board meetings are properly convened,
- agendas are prepared,
- minutes are recorded,
- statutory records are maintained,
- filings are made,
- and governance processes are followed.
In many countries, this is the job of the Corporate Secretary (CS)— a recognized profession, sometimes with formal qualifications.
Japan never developed this role because of a cultural assumption: “Basic things are done automatically, internally.”
But in reality, even small companies struggle. Missed registry updates are common. And governance gaps appear quickly.
If governance is essential for companies, what about funds?
You might be wondering why a blog about funds is spending so much time on companies.
Because a fund is, structurally, a company that conducts the business of investment.
And once you see that, everything clicks.
But there is one critical difference:
Funds do not hire employees.
This single fact raises the governance difficulty dramatically.
The key difference: companies hire people, funds delegate everything
A fund must delegate:
- investment decision‑making,
- asset custody,
- valuation and reporting,
- capital call and distribution calculations,
- and sometimes even compliance functions.
Investment decisions may be:
- made by the GP’s board,
- delegated to an investment committee,
- or fully outsourced to an investment manager.
Custody is handled by banks or custodians. In the EU, by a Depositary. Administration is outsourced to fund administrators.
So the GP or management company must constantly ask:
- Is this delegation appropriate?
- Is the delegate performing properly?
- Do we need to replace them?
Cayman addressed this in 2023 when CIMA introduced the New Governance Rule, requiring funds to document:
- delegation procedures,
- monitoring processes,
- conflict‑of‑interest management,
- and governance frameworks.
And this is where the Corporate Secretary becomes essential for funds
Board meetings, scheduling, materials, minutes, delegation approvals, director appointments and removals— these are the backbone of fund governance.
And someone must run this process in accordance with local law.
That someone is the Corporate Secretary.
A Very Japanese Question:
“Can’t someone just do this on the side?”
At this point, some readers—especially in Japan—might say:
“Isn’t this just following legal requirements? Can’t we teach someone the basics and have them handle it part‑time?”
If that actually worked, I’d have no objection.
And indeed, many Japanese companies and funds do operate this way. But in practice, problems appear quickly:
- missed updates after legal amendments,
- inconsistent interpretations between staff members,
- uneven quality of board minutes,
- and LPs asking for explanations of past decisions that no one can properly reconstruct.
And remember: investment minutes are not just a formality. LPs may request them to verify the reasoning behind decisions. Some investors evaluate a fund’s legal existence and compliance posture through these records.
So the question becomes (again):
Is this really something you want handled “on the side”?
This is why, in many jurisdictions, Corporate Secretary is a profession, with qualifications and even specialized service providers.
Speaking of Japan: what about disclosure in Japanese funds?
Here’s the surprising part.
Under Japan’s:
- Limited Partnership Act (LPS Act),
- Civil Code (for voluntary partnerships),
- and even the Investment Trust Act,
there is no explicit requirement to:
- create investment decision minutes,
- store them,
- or disclose them to investors.
Japan tends to emphasize results (“Did the investment perform?”) rather than process (“How was the decision made?”).
But overseas, LPs often request:
- investment committee minutes,
- board minutes,
- delegation approvals,
- conflict‑of‑interest documentation.
Not because they want to micromanage, but because process is part of governance.
So Japan’s lack of a framework for recording and disclosing decision‑making is not just a legal gap. It’s a structural blind spot in the industry.
By the way, there’s a commonly confused service: Registered Office (RO)
In offshore jurisdictions, there is a service that looks similar but is fundamentally different:
Registered Office (RO)
The RO provides:
- a legal address,
- statutory record‑keeping,
- maintenance of registers,
- and a point of contact for regulators.
This is about legal existence.
Corporate Secretary (CS)
The CS handles:
- board operations,
- meeting scheduling,
- agenda preparation,
- minute‑taking,
- delegation approvals,
- governance processes,
- and compliance with local corporate law.
This is about governance and decision‑making.
If I had to summarize in one line:
- RO keeps the entity alive.
- CS keeps the governance functioning.
They are complementary, not interchangeable.
Conclusion
The Corporate Secretary, supporting the board as the fund’s decision‑making body, is the hidden backbone that ensures transparency and compliance for the ultimate economic beneficiaries—its investors.
If you’re an LP, you might start wondering what lies behind the reports you receive. If you’re a GP or fund manager, you might realize the value of keeping records that allow you to evaluate your own past decisions.
Because in the end:
Governance doesn’t move with a box.
It moves with process, records, and people.
And that is where the borders can—and should—be crossed.
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