What is corporate governance?
The system by which companies are directed and controlled.
Good corporate governance ensures (5)
- Fulfil long term strategic goals
- Consider and care for interests of employees
- Take into account environment and local community
- Maintain relationships with stakeholders
- Compliance with applicable legal and regulatory requirements
AIM listed can chose to follow
UK Corporate Governance Code OR QCA Corporate Governance Code
Firms which audit 20 or more listed entities follow
Audit Firm Governance Code
G20/ OECD Six Core Principles
- Basis for effective CG framework
- Rights and equitable treatment of shareholders and key ownership functions
- Institutional investors, stock markets and others
- Role of stakeholders in CG
- Disclosure and transparency
- Responsibilities of the board
FRC Guidance on Risk Management, Internal Control and Related Financial and Business Reporting (2014) > 3 specific areas for consideration
- Risk management and internal control
- Going concern
- Viability statement
Two-part disclosure statement required by Listing Rules
Comply or explain basis
Section 404 Controls report requirements (3)
- Management state responsibility for establishing and maintaining adequate internal control structure
- Management make assessment of and representations about effectiveness of internal control structure and procedures
- Every audit report must attest to assessment made by management
SEC Monitors
PCAOB
PCAOB (Public Company Accounting Oversight Board)
Oversees and investigates audits and auditors of public companies. Enforces compliance with SOx.
SEC Director Remuneration
Require companies to allow shareholders to vote on the pay that directors receive, and to vote on how frequently they wish to vote on the level of pay
Committees (3)
- Audit
- Remuneration
- Nomination
Viability statement
Provision 31
