Chapter 12 - REGULATORY OVERSIGHT

Question 1

It is a recommendation of the _________________ _________ that boards of the FTSE350 companies undertake an independent board evaluation exercise at least once every ________ years, complemented by formal and rigorous annual evaluation of the performance of the board, its committees and individual directors (Governance Code principle L, provision 21).

Answer 1

Governance Code;

Three

Question 2

Board evaluations are often comprised of what two distinct areas?

Answer 2

Structure and composition

Director behaviours/activities

(the structure of the board in terms of composition and procedures and secondly the behaviour and activities of the directors individually and collectively?

Question 3

Listed companies should outline the evaluation process and any recommendations made in their __________ _________ and report back progress on implementing those recommendations in the
following year’s report.

Answer 3

Annual Report

Possibly the most important consideration is what will be done with the results of the evaluation, how much detail will be reported in the annual report, what actions and follow-up will there be.

Question 4

How often should listed companies undertake a board evaluation?

Answer 4

i) Internally Every year

ii) Externally facilitated At least every three years – FTSE 350 companies

Question 5

Must every director be evaluated every year?

Answer 5

UK Corporate Governance Code provision 21 provides that for listed companies there should be a formal and rigorous annual evaluation of the performance of the board, its committees, the chair and individual directors

Question 6

Should evaluations follow the same format and cover the same topics each year?

Answer 6

NO

Question 7

What are the two main options available to members under the Act to take action against directors?

HINT:
Un_____ Pr____________
Deriv________ A_______ Cl______

Answer 7

Actions for unfair prejudice or derivative action claim

Question 8

Can an HMRC inspector with the power of arrest make an arrest for any criminal offence?

Answer 8

No, their power is limited to HMRC offences

Question 9

In general how is the power of entry and search granted and who to?

Answer 9

By the courts/magistrates to a police constable

Question 10

What are four of the eight key stakeholder groups a company generally has?

Answer 10

• members;
• directors;
• creditors;
• suppliers;
• local community;
• employees (present and former);
• the environment; and
• the government.

Question 11

Name the five key government agencies / regulatory bodies in the UK, who have certain investigative powers.

Answer 11

BEIS: Department for Business, Energy and Industrial Strategy

HMRC: HM Revenue and Customs

FCA: Financial Conduct Authority

PRA: Prudential Regulation Authority

CMA: Competition and Markets Authority