Chapter 2 Flashcards
Who appoints a board of directors in a public company?
Shareholders of public companies appoint a board of directors and then elect a chair from
their members. An important duty of the chair is to ensure that meetings are run in an orderly
and efficient manner.
What are the two types of director?
- Executive Directors
- Non-executive directors
What are the characteristics of an executive director?
- Work full time in the company.
- Given management responsibility for running parts of the business.
- One is usually appointed by the board to be accountable for the
running of the company on a day-to-day basis – known as either the
chief executive officer (CEO) or managing director. - CEO/managing director appoints the company management.
What are the characteristics for a non-executive director?
Work part time in the company.
* Chosen for their particular area of expertise.
* Do not perform an executive management role in the company.
* Attend board meetings and may be members of subcommittees in
order to provide independent views on matters such as audit,
management remuneration and risk management.
What are the responsibilities of the board?
- Regulation of senior management and ensure they uphold shareholder interests
- Approve the report and accounts, budgets etc
- Selecting, appraising and rewarding the CEO
- Overseeing overall risk management
- Ensure integrity and principles are upheld
What is corporate governance?
stringent regulatory requirements that determine the way by which companies (especially public companies) are controlled
internally through the board and executive management
Where does corporate governance set standards?
- Board Composition
- Remuneration
- Accountability and audit
- Shareholder relations
Who appoints the UK governance code?
The financial reporting council
What is meant by cabinet responsibility?
the members of the cabinet must publicly show a unified position, and must vote with the government even if they privately disagree with the decision that has been made.
What is the role of the finance director?
The role of the Finance Director has overall control and responsibility for all financial aspects of company strategy and is expected to analyse figures and implement recommendations based on these findings, with the most profitable outcomes.
What is the role of a company secretary?
- Maintaining the companies statutory books
- Filing annual returns at companies house
- Arranging meetings of the directors and shareholders
- Informing companies house of any significant changes
- Ensuring security of legal documents
What is the role of the chief actuary?
- technical pricing of new and existing products;
- calculation of claims reserves;
- calculation of risk-based capital requirements;
- assessment of investment risk for funds supporting technical reserves.
What are the additional senior positions within an insurance company?
- Chief risk officer.
- Head of internal audit.
- Underwriting director.
- Claims director.
- Marketing director.
- Head of HR.
- Head of IT.
- Strategy director.
- Investment director.
What is the broad role of management?
Management can be said to be the process of planning, organising, leading and controlling
the material, financial and human resources of an organisation.
To be effective, the management process requires a combination of forward planning,
What are the business components within an insurance company?
- Physical resources
- Financial resources
- Human resources
