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1
Q

Three main functions of a nomination committee

A

Lead the process of appointments

Ensure plans in place for orderly succession for both the board and senior management positions

Oversee development of diverse pipeline for succession

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2
Q

What are the threats to audit independence?

A
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3
Q

Primary purpose of the Audit Committee?

A

Monitor the company’s financial reporting process and integrity of financial and narrative statements

Monitor company’s internal control, risk management systems and internal audit process

Oversee and monitor the audit of the company’s financial statements and independence of the external auditors

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4
Q

Factors that impact a directors independence?

A

Employee within last 5 years

Material business interest within last 3 years

Received additional remuneration

Close family ties with company advisors, directors or senior employees

Represents significant shareholder

Served on board for >9 years

Cross-directorship

Represents significant shareholder

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5
Q

Relevant principles and provision when discussing diversity on the board

A

Principle J

Provision 23

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6
Q

Relevant principle when referring to succession planning

A

Principle J
Principle K

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7
Q

Features of a nomination committee

A

Under The Code - Majority of members should be independent NED’s

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8
Q

Features of a audit committee

A

Under The UK Code and DTR 7.1 - A/C must have competence relevant to sector

UK Code - Atleast 3 members all independence NED’s

DTR 7 - Majority of members independent

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9
Q

Examples of stakeholder engagement activities

A

Workforce
Engagement surveys
Feedback meetings

Customers/ suppliers
Questionnaires
Forums
Individual meetings

Community
Existing community groups
Representative bodies

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10
Q

Who is mentioned could take the lead on Stakeholder engagement activities in The Code for listed companies?

A

Employee on the board
Designated NED
Works council

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11
Q

Types/ 5 approaches to CSR

A
  1. Environmental - impact on environment
  2. Community - supporting local community
  3. Employees - diversity wellbeing
  4. Ethics - Having a code of ethnics
  5. Suppliers - ensure principles aligned
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12
Q

How can the board measure CSR initiatives?

A
  1. Focus on outcomes
  2. Quantitative and qualitative measurements of outcomes
  3. Listen to stakeholders
  4. Not undervalue stories
  5. Learn from others
  6. Identify and measure the risks
  7. Measure, refine, modify, measure again
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13
Q

What are the categories of CSR Activity?

A

Philanthropy

Partnerships

Pet projects

Propaganda

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14
Q

Role of CoSec in CSR?

A
  1. KPI’s approved by Board
  2. Work work board on reporting framework
  3. Review of annual process presented to board

4.

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15
Q

Ways of engaging with stakeholders?

A
  1. Proactive - understand concerns and issues
  2. Reactive - defensive forced response
  3. Interactively - ongoing relationship respect and openness
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16
Q

Engagement with the workforce - relevant principles and provisions of The Code? And Wates

A

The Code
Principle E
Provision 5
Provision 6

Wates
Principle 6

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17
Q

What makes a large company?

A
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18
Q

Advantages of CSR?

A

Improve financials

Press opportunities and brand awareness

Increased customer retention and loyalty

Increased employee engagement

Attract and retain top talent retention

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19
Q

What is the alternative to the 5 types of CSR?

20
Q

What should a strategic report do?

A
  1. Describe companies strategy, objectives, model
  2. Explain trends and factors affecting company
  3. Describes companies principle risks and uncertainties
  4. Include analysis or development and performance for business
  5. Include into about environment, social, community, human rights, anti corruption
  6. Include info on gender diversity
21
Q

When is strategic report required?

22
Q

What is narrative reporting?

23
Q

What is narrative reporting?

24
Q

Integrated reporting six types of capital

25
Integrated reporting six types of capital
26
What is triple bottom line reporting and what are its challenges?
27
What are the three main types of internal controls?
1. Preventative controls - different authority thresholds 2. Detective controls - Alerts (fraud alert, AML triggers) 3. Corrective controls - If fraud detected, process for dealing
28
What is an internal control system?
Made up of all the structures, policies and procedures within an organisation Relates to the management to financial, operational and compliance risks
29
Internal control systems provide reasonable assurance to achieve objectives in what three objectives?
1. Effectiveness and efficiency of operations 2. Reliability of financial reporting 3. Compliance with laws and regulations
30
What is the procedure for the introduction of a disaster recovery plan?
1. Specificy essential operations 2. Indentify and analyse potential threats 3. Identify possible reactions to threats 4. Specify where operations should be transferred to 5. Identify personal needed to maintain systems 6. Communicate with stakeholders
31
Seven Nolan principles
32
Definitions of corporate governance
The system by which companies directed and controlled
33
What is company purpose?
1. Reason in business 2. Everything company does stems from purpose - sits at the top of the corporate governance framework 3. Helps Board make decisions about its strategic goals and consideration of risk 4. Ensure company can focus on its efforts on being successful in the long term, taking into account stakeholders 5. Helps set organisations governance framework of policies and procedures 6. Gives clarity of purpose for Board, management, employees and investors
34
Purpose of private/ listed companies, charities and right
Private/ listed companies - profit Charities - community benefit Right by guarantee - benefit of members
35
What are the four agency conflicts?
1. Moral hazard - managers interests in benefits of position 2. Level of effort - managers will work less hard 3. Earnings retention - Managers don’t want to pay dividends 4. Time horizon - Managers tend to think of short term
36
Different types of shareholder rights?
Ownership and transfer of shares Equal treatment Shares in profits Attend meetings, request meetings and vote - 5%> Enfranchising indirect shareholders
37
What are the three main types of internal controls?
Preventative Detective Corrective
38
Internal control systems seek to provide reasonable assurance, in which categories?
Effectiveness Reliability Compliance
39
Audit committee in relation to risk and internal controls
Code Provision 25 + DTR 7.2 Responsibility to **review internal financial controls, internal control systems and risk management system** FRC Guidance on Board Effectiveness Discharge **governance responsibilities** (audit, risk and internal control) Review emerging and principal risks
40
Factors to consider when dealing with risk (acquisition)
1. **Impact** Review emerging and principal risks Mapping exercise - identification and analysis of risks BOS Business risks - financial and non-financial Operational risks Strategic risks What risks are? How significant? Likelihood and size? New risks - business, cyber security, repuational and ethical, governance, potential deficiencies 2. **Procedures and controls** Procedures and controls in place to manage and mitigate risks 3. **Internal control systems** Review of internal control systems Ensure smooth integration Resources allocated 4.**Report to audit committee and re-evaluation** A/C seek regular updates Re-evaluate principle risks
41
Purpose of the renumeration committee?
Code Provision 33 Determine the policy for executive director remuneration Setting renumeration for the chair, executive directors and senior management
42
The annual remuneration report of a quoted company is required to include what?
Details regarding membership of the rem co and any advisors Statement by rem co chair summarising major decisions and changes in relation to directors remuneration during the year and context as to why changes/ decisions occurred
43
What must the directors remuneration report include?
Directors rem policy if policy is being put to SH for approval at accounts meeting (AGM) Annual remuneration report (details of rem payments to directors under FY)
44
What is a quoted company?
45
Different types of risk
Business risks - damage by fire, flood or other natural disasters, loss of important supplier Financial risks - insufficient cash flow, credit, operational, foreign investment, legal, equity, and liquidity risk Operational risks - cyber attack, employee conduct, employee error Compliance risk - fraud, money laundering, intellectual theft

RW Corporate Governance (11 decks)

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