Code / FRC guidance Flashcards
5 areas of UK CG Code
- Board Leadership and Company Purpose
- Division of Responsibilities
- Composition, Succession and Evaluation
- Audit, risk and Internal Control
- Remuneration
Who is responsible for UKCG Code, and enforces it?
FRC
What to search in Code to find guidance on reporting on the code?
‘Reporting’
Re. UKCG Code, listed companies are required to make a statement on how they have: (2)
- Applied the spirit of the principles
- Complied with, or not complied with, the Provisions and supporting guidelines for the Code
What should justification for non-compliance with a provision do? (3)
- Set out the background
- Provide clear rationale for the action the company is taking
- Explain the impact the action has had
What to search in Code to find guidance on overarching role of board?
‘role is to’
Which Code Principle is re. board composition?
Principle G
Which UKCG Code provision is re. exec Dirs vs NEDs?
Provision 11
What to search in Code to find summary of chair’s role?
‘chair leads’
Which provision is re. the independence of NEDs?
Provision 10
Which provision is re. the independence of the chair?
Provision 9
Which Provisions comment on need for separation of Chair & CEO, and roles
Provisions 9 & 14
What to search in Code to find guidance on SID?
‘senior independent director’
3 committees which must be established as per Code
- Nomination committee
- Audit committee
- Remuneration Committee
What is the 4th committee that some board are expected to establish?
Risk committee
Which boards are expected to establish a risk committee?
Financial services sector boards
Which committee will normally undertake functions of risk committee when there is no risk committee?
Audit committee
What to search in Code to find guidance on composition and role of nomination committee?
‘nomination committee’
What to search in Code to find guidance on composition and role of audit committee?
‘audit committee’
What to search in Code to find guidance on composition and role of audit committee?
‘remuneration committee’
Which provision of Code states that CoSec should be appointed and removed by board as a whole?
Provision 16
What to search in Code to find guidance on skills, experience and knowledge of board?
‘skills’
What to search in Code to find guidance on diversity?
‘diversity’
Principle and Provisions re. nomination committee/appointment process
Principle J, Provisions 17 & 20
What to search in Code to find guidance on time commitments for board members?
‘of the time’
What to search in Code to find guidance on open-advertising for appointment of chair?
‘open advertising’
What to search in Code to find guidance on length of chair’s and NED’s appointment?
‘nine years’
What to search in Code to find guidance on the need to refresh the board and ensure service length is not too great?
‘refresh’
What to search in Code to find guidance on director re-election?
‘re-election’
What to search in Code to find guidance on information available to the board?
‘clear information’
Which two Principles of Code relate to business ethics?
- Principle B - ‘directors must act with integrity, lead by example, and promote the desired culture’
- Principle E - ‘policies and practices are consistent with company’s values… workforce able to raise matters of concern’
What to search in Code to find guidance on board evaluation? (2)
‘appraise’
‘evaluation’
What to search in Code and FRC guidance on BE to find guidance on professional development? (2)
‘develop’
Principles and Provisions in Code re. fin. reporting
M, N & 27, 30
Which Principle and Provision relate to engagement with the workforce?
Principle E, Provision 5
What to search in Code to find guidance on internal control and risk management?
‘risk’ only in part 4
Which Principle of Code is re. long-term viability statement?
Provision 31
What to search in Code to find guidance on annual review of risk management/internal control systems?
‘review’ only in part 4
What to search in Code to find guidance on whistleblowing?
‘raise’
Which UKCG Code principle & provisions is re. Board’s engagement with shareholders and stakeholders?
Principle D, Provisions 3 and 5
With regards UKCG Code, what is a ‘smaller company’?
A company who was outside FTSE350 for entirety of immediately preceding year
What to search in Code to find guidance on avoiding rewards for failure?
‘formulaic’
