Corporate Governance Flashcards
(7 cards)
What are the 4 sub committees that would be good CG practice
Which is the least essential
Audit comm
Nominations comm
Remuneration comm
Risk comm
Risk comm not compulsory but listed companies subject to significant financial market risk will usually have one
What does the nominations comm do (2)
How should this comm be made up
Ensure BOD has right balance of ex and NEDs with appropriate skills knowledge and experience
Recommend new board members
Made up of a majority of independent NEDs
What does the audit comm do
How is it made up
Liase with external auditors on financial reporting
Supervise internal audit (or consider the need for internal audit)
At least 3 NEDs one who has recent relevant financial experience, no exec directors
What does the risk comm do
How is it made up
Oversee the organizations risk management systems
Comprised entirely of NEDS
What does the remuneration comm do
How is it made up
Setting remuneration for all exec directors and usually senior management
At least 3 NEDs and no exec directors
What is the difference between how exec directors and NEDs should be paid
Exec directors should have an element of their pay that is performance related
NEDs should not include share options or other performance related elements