Corporate Governance Flashcards
Who does the UK Corporate Governance Code apply to?
All premium listed companies
Is the UK corporate governance code a legal requirement?
No but a “comply or explain” approach is taken. Companies must explain any non-compliance in their annual report.
How many years must someone have been outside a company to be counted as independent?
5 years
How long can a NED serve on the board?
9 years
How long can the Chair be Chair for?
9 years
After how many years does a NED need to be subjected to a rigorous review?
6 years
How often should NEDs meet to appraise the Chair’s performance?
annually
Who appoints, removes and sets the remuneration of Executive Directors?
NEDs
Who should be on the nominations committee?
over 50% NEDs
Who can chair the nominations committee?
The Chair or a NED
What are the rules for executive directors regarding being involved in boards in premium listed companies?
They should not be Chair of a premium listed company
They should not have more than one NED role at a premium listed company
Can the chair be chair of more than one premium listed company?
yes
Who should be on the audit committee?
For premium listed companies, at least three NEDs
For smaller listed companies, at least two NEDs
At least one member must have recent and relevant financial experience
Who should chair the audit committee?
An NED (can’t be the chair)
What are the four responsibilities of the audit committee?
Financial statements
Financial controls
External auditor (recommendations)
Whistle-blowing
