Code / FRC guidance

Question 1

5 areas of UK CG Code

Answer 1

• Board Leadership and Company Purpose
• Division of Responsibilities
• Composition, Succession and Evaluation
• Audit, risk and Internal Control
• Remuneration

Question 2

Who is responsible for UKCG Code, and enforces it?

Answer 2

FRC

Question 3

What to search in Code to find guidance on reporting on the code?

Answer 3

‘Reporting’

Question 4

Re. UKCG Code, listed companies are required to make a statement on how they have: (2)

Answer 4

• Applied the spirit of the principles
• Complied with, or not complied with, the Provisions and supporting guidelines for the Code

Question 5

What should justification for non-compliance with a provision do? (3)

Answer 5

• Set out the background
• Provide clear rationale for the action the company is taking
• Explain the impact the action has had

Question 6

What to search in Code to find guidance on overarching role of board?

Answer 6

‘role is to’

Question 7

Which Code Principle is re. board composition?

Answer 7

Principle G

Question 8

Which UKCG Code provision is re. exec Dirs vs NEDs?

Answer 8

Provision 11

Question 9

What to search in Code to find summary of chair’s role?

Answer 9

‘chair leads’

Question 10

Which provision is re. the independence of NEDs?

Answer 10

Provision 10

Question 11

Which provision is re. the independence of the chair?

Answer 11

Provision 9

Question 12

Which Provisions comment on need for separation of Chair & CEO, and roles

Answer 12

Provisions 9 & 14

Question 13

What to search in Code to find guidance on SID?

Answer 13

‘senior independent director’

Question 14

3 committees which must be established as per Code

Answer 14

• Nomination committee
• Audit committee
• Remuneration Committee

Question 15

What is the 4th committee that some board are expected to establish?

Answer 15

Risk committee

Question 16

Which boards are expected to establish a risk committee?

Answer 16

Financial services sector boards

Question 17

Which committee will normally undertake functions of risk committee when there is no risk committee?

Answer 17

Audit committee

Question 18

What to search in Code to find guidance on composition and role of nomination committee?

Answer 18

‘nomination committee’

Question 19

What to search in Code to find guidance on composition and role of audit committee?

Answer 19

‘audit committee’

Question 20

What to search in Code to find guidance on composition and role of audit committee?

Answer 20

‘remuneration committee’

Question 21

Which provision of Code states that CoSec should be appointed and removed by board as a whole?

Answer 21

Provision 16

Question 22

What to search in Code to find guidance on skills, experience and knowledge of board?

Answer 22

‘skills’

Question 23

What to search in Code to find guidance on diversity?

Answer 23

‘diversity’

Question 24

Principle and Provisions re. nomination committee/appointment process

Answer 24

Principle J, Provisions 17 & 20

Question 25

What to search in Code to find guidance on time commitments for board members?

Answer 25

'of the time'

Question 26

What to search in Code to find guidance on open-advertising for appointment of chair?

Answer 26

'open advertising'

Question 27

What to search in Code to find guidance on length of chair's and NED's appointment?

Answer 27

'nine years'

Question 28

What to search in Code to find guidance on the need to refresh the board and ensure service length is not too great?

Answer 28

'refresh'

Question 29

What to search in Code to find guidance on director re-election?

Answer 29

're-election'

Question 30

What to search in Code to find guidance on information available to the board?

Answer 30

'clear information'

Question 31

Which two Principles of Code relate to business ethics?

Answer 31

- 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'

Question 32

What to search in Code to find guidance on board evaluation? (2)

Answer 32

'appraise' 'evaluation'

Question 33

What to search in Code and FRC guidance on BE to find guidance on professional development? (2)

Answer 33

'develop'

Question 34

Principles and Provisions in Code re. fin. reporting

Answer 34

M, N & 27, 30

Question 35

Which Principle and Provision relate to engagement with the workforce?

Answer 35

Principle E, Provision 5

Question 36

What to search in Code to find guidance on internal control and risk management?

Answer 36

'risk' only in part 4

Question 37

Which Principle of Code is re. long-term viability statement?

Answer 37

Provision 31

Question 38

What to search in Code to find guidance on annual review of risk management/internal control systems?

Answer 38

'review' only in part 4

Question 39

What to search in Code to find guidance on whistleblowing?

Answer 39

'raise'

Question 40

Which UKCG Code principle & provisions is re. Board's engagement with shareholders and stakeholders?

Answer 40

Principle D, Provisions 3 and 5

Question 41

With regards UKCG Code, what is a 'smaller company'?

Answer 41

A company who was outside FTSE350 for entirety of immediately preceding year

Question 42

What to search in Code to find guidance on avoiding rewards for failure?

Answer 42

'formulaic'