Chapter 5- Competency

Question 1

Detail the 5 areas of the UK governance code.

Remember **any UK ‘listed’ business is subject to this.

Answer 1

Leadership
Effectiveness
Accountability
Remuneration
Shareholders

Question 2

What are the responsibilities of directors?

Answer 2

Act in accordance with companies constitution.
Promote success of the company
Exercise independent judgement
Exercise skill, care and diligence
Avoid conflict of interests
Declare personal interest in transactions

Question 3

Based on higs report 2003- detailed roles of the NEDS, What are they?

Answer 3

Be a custodian of the business governance

People-effective part of the board
Risk-Protect the business
Performance-growth
Strategy-

**diversity of the board= strength.

Question 4

What are the responsibilities of the board?

Answer 4

• *exec- work for the company ‘day job’
• *non exec- only responsibility board duty

Regulate the executive
Approve plans/accounts/budgets
Succession planning
Mitigate risk
Compliance and integrity

Question 5

What competencies would you expect from a NED?

Answer 5

Knowledge
Skills
Behaviours
Expertise

Question 6

Detail the different type of competency policies and measures.

Answer 6

Policies:
Policies and principles (set to give direction)
Standards to be maintained
Procedures to enable consistency

Measures:
T and C standards being maintained
Approved persons expertise
Performance management
Competencies/values

Question 7

What are the competencies for a senior manager (SIF)?

**Mrr BFG

Answer 7

Market knowledge
Risk management
Regulatory framework

Business model
Financial analysis
Governance/oversight