Code Of Corporate Governance

Question 1

13 principles

Answer 1

Provision

Question 2

to encourage more thoughtful and meaningful application

Answer 2

integrated, firm-wide perspective of a company’s risk exposure.

Question 3

variations from the Provisions are acceptable to the extent that companies explicitly state and explain

Answer 3

how their practices are consistent with the intent of the relevant Principle.

Question 4

Board Diversity Policy

Answer 4

Companies must disclose their board diversity policy and the progress made towards implementing it, including objectives, in their annual report.

Question 5

Non Executive Directors:

Answer 5

A new Provision provides that non-executive directors must make up a majority of the Board.

Question 6

Remuneration disclosure

Answer 6

Companies will have to disclose the link between remuneration and value creation.

Question 7

Disclosure of reasons for not paying dividends

Answer 7

If directors decide not to declare or recommend a dividend, this must be announced together with the reason(s) for such decision.

Question 8

Practice Guidance

Answer 8

to provide more flexibility for companies.

Question 9

Nine-year Rule

Answer 9

For independent directors that have served beyond nine years, their continued appointment will be subject to a two-tier vote to be approved by the majority of (A) all shareholders; and (B) all shareholders excluding shareholders who also serve as directors or the CEO (and their associates).

Question 10

Size of the board

Answer 10

For smaller Boards, it would be the same directors serving on all the Board committees.

Question 11

the function of risk management can be taken up by the Audit Committee.

Answer 11

Unless a company has a large Board with sizeable experienced and knowledgeable directors, setting up a separate Board Risk Committee can appear to be more form than substance.

Question 12

the quality and ability of the directors to objectively engage management in reviewing and overseeing the risks, policies and operations of the company, and the performance of management.

Answer 12

is functioning as intended.

Question 13

What is important is the adequacy and robustness of the risk management framework and overall control governance policies.

Answer 13

If the directors can effectively oversee and ensure that management puts in place an adequate and robust risk management framework, and that governance policies are properly and consistently implemented across the organisation, it might not be essential to have a separate Board Risk Committee.

Question 14

heightened roles and responsibilities of the Nominating Committee (NC).

Answer 14

to allocate sufficient time and effort to conduct their Board duties effectively.

Question 15

The NC not only assesses the independence of the Board,

Answer 15

it also assesses the effectiveness of the Board sub-committees.

Question 16

Council has decided not to specify the maximum number of directorships a director is allowed to hold.

Answer 16

Instead, the NC has been tasked to set out the maximum number that a director can hold.

Question 17

Risk traditionally is part of the Audit Committee (―AC‖) agenda, and because the AC already oversees risks related to the integrity of the financial statements,

Answer 17

it is in a good position to have oversight of most of the company‘s risks.

Question 18

Principle 1

7 provisions

Answer 18

The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.

Question 19

Principle 2

5 provisions

Answer 19

The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company.

Question 20

Principle 3

3 provisions

Answer 20

There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making.