Corporate Governance Flashcards
Who does the UK Corporate Governance code apply to
All premium listed companies
What are the requirements for becoming eligible to be a Chairman
Independent of company
Chair and Chief Executive must be different individuals
Chief Executive cannot go on to become Chairman
What are the responsibilities of the Non-Executive Directors (NEDs)
Review financial controls and risk management
Scrutinise management performance
Review the Chair’s performance annually
What are the requirements of a nominations committee’s members
Over 50% of members should be independent NEDs
NEDs should be appointed for specific terms
Any longer serving NEDs should be subjected to review
How regularly should directors be reviewed and on what bases
Annually
Based on effectiveness and time committment
What are the limitations to being eligible to become an executive director
Cannot take the role of Chair of another premium listed company
Cannot take on more than one NED role in a premium listed company
What are the limitations to be eligible to become the Chair
Can be Chair of more than one premium listed company
Should disclose any other significant commitments to the board
What are the requirements of an audit committee
At least 3 NEDs for premium listed companies
At least 2 NEDs for smaller listed companies
At least one member who has relevant financial experience
What are the responsibilities of the audit committee
Financial statements
Financial controls
External audit
Whistle-blowing
Who sets the remuneration and how for the executive directors
The remuneration committee determines the remuneration
Determined based on performance related elements
Who sets the remuneration and how for the non-executive directors
The board determines the remuneration
Reflects time commitments and responsibilities
What are the requirements of an audit committee
At least 3 NEDs for premium listed companies
At least 2 NEDs for smaller listed companies
What are the responsibilities of the internal audit team
Assessing how risks are identified, analysed and managed
Advising on risk management
Ensuring company’s assets are safeguarded
Ensuring laws and regulations are complied with
Detect or deter fraud
