2 - King IV Principles 4 - 16 Flashcards
principle for strategy and performance?
4
- the GB should steer and set direction for realisation of core purpose through strategy
- should delegate to mgmt the development of strategy
- should ongoingly oversee mgmt strategy implementation
principle for reporting?
5
- GB should ensure that reports issued enable SH to make informed assessments of comp performance and s/m/l term prospects
- company should issue integrated report at least annually and ensure the integrity of reports
principle for primary role/resp of the GB?
6
- GB should steer org, set its strategic direction
- approve policy and plans to give effect to that direction
- oversee mgmt execution/impl of strategy
- ensuring accountability for comp performance
risks associated with the BOD?
- directors putting their ints above that of SH
- conflicts of int
- misuse of comp assets
- inappropriate remuneration schemes
principle for composition of the GB?
7
- balance of knowledge, skills, experience, diversity
- majority independent NEDs
- CEO and at least one other executive
- periodic rotation of members
- succession plan
duties of non-executive board members?
- challenge and monitor CEO
- bring indie perspective to dec-making
independent non-executive board members?
- no direct interest in company
- not immediate family of an employee (or someone who was an executive in the last 3yrs)
- not a professional advisor
how should the process of nomination, election and appt of GB members be?
- formal and transparent
- look at diversity, skills, background check before nom
GB member reelection noms should be based on?
- performance
- attendance in previous meetings
- approved by whole board
what should happen upon election of GB member?
the t&cs for serving as a director should be formalized in an appointment letter
what should happen after election of GB member?
- induction
- members with little to no experience should get training/mentor
- professional development programme and regular CG briefings should be provided to all directors
recommendations for independence and conflicts of interest?
- annually each member must declare their interests they hold
- at start of each meeting, each member must declare any conflict of interest in an agenda matter
why is independence of NEDs important?
no interest will influence decisions made. will be made in comp’s best interests
when may a member not be independent?
- significant capital provider
- owns material value shares
- executive mgr in past 3 yrs
- audit team/ext auditor in past 3 yrs
- significant/ongoing professional advisor
- GB member of a significant cust/supp or related party
- gets remuneration based on comp performance
board chair requirements?
- iNED
- not CEO
- not retired CEO until 3 yrs past
- should have succession plan
purpose of lead independent?
- lead in absense of chair
- intermediary between chair and members
- strengthen board independence
principle for GB committees?
GB should ensure that its delegation arrangements promote independent judgement and effective duty discharge
audit committee duties?
- meet annually w audtiors w/out mgmt
- oversee assurance services
- ensure AFS integrity
- dedicate sufficient time to the resp of risk governance if delegated by board
role of the nominations committee?
- evaluate BOD perf
- examine skills needed for BOD candidates
- nom, elect, appt board members
- succession planning
minimum members in each comm?
3
comm meeting attendance?
every board member can attend if invited to observe, but can’t vote, participate (unless allowed), can’t get attendance fees
audit comm members?
all iNEDs, incl chair (not CEO)
noms comm members?
NEDs, mostly indie
rem comm members?
NEDs, mostly indie
chair = iNED
