Board Leadership & Company Purpose Flashcards
According to Principle A, who leads a company and what is their role?
A company is led by an effective and entreprenurial board. Their role is to promote long-term sustainable success, generate value for shareholders and contribute to society
According to Principle B, what must the board establish and how should they act?
The board must establish the company’s purpose, values and strategy - this should be in line with culture. Directors to act with integrity, lead by example and promote the desired culture
What are the two things which Principle C outlines?
Ensure necessary resources are in place for the company to meet objectives and measure performance.
Establish framework of prudent and effective controls to assess and manage risk
What is Principle D?
Ensure effective engagement with and encourage participation from shareholders and stakeholders to meet responsibilities to these parties
What is Principle E?
Ensure workforce policies and practices are consistent with values and support long-term sustainable success.
Workforce should be able to raise any matters of concern
According to provision 4, what must the board do if 20% of votes have been cast against a resolution?
The company should explain what actions it intends to take to consult shareholders in order to understand the reasons behind the results.
Following this, an update on the views received from shareholders and actions taken should be published 6 months after the shareholder meeting.
The board should provide a final summary in the AR on what impact the feedback has had on the decisions the board has taken and any actions or resolutions now proposed.
Provision 3 speaks about engagement with shareholders - expand on this
Chair should seek regular engagement with major s/h to understand their views on governance and performance against strategy
Committee chairs should seek engagement with s/h on significant matters related to their areas of responsibility
Chair should ensure board as a whole has clear understanding of views of s/h
For engaging with the workforce, what engagement mechanisms are highlighted?
- Director appointed from the workforce;
- A formal workforce advisory panel
- A designated NED
One or a combination should be used.
According to provision 8, what should be included in the board minutes?
Directors’ concerns about the operation of the board or the management should be recorded in board minutes
When a NED resigns and has any concerns what should happen?
When a NED resigns and has any concerns, they should provide a written statement to the chair, for circulation to the board.
