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Dear Tutor,
Today I was doing a question related to Corporate Governance. However, the question was about a listed company and therefore I had to state how to conduct a good corporate governance. Everthing was fine with the question.
One of the the main proposals for a good corporate governance is to have an audit committee. Please can you state who set up the audit committee, as for example – the shareholders? directors?
Thanks for your time and cooperation.
Kind Regards,
BrandonTo quote form the UK Corporate Governance Code:
“The board should establish an audit committee of at least three, or in the case of smaller
companies two, independent non-executive directors. In smaller companies the company chairman may be a member of, but not chair, the committee in addition to the independent non-executive directors, provided he or she was considered independent on appointment as chairman. The board should satisfy itself that at least one member of the audit committee has recent and relevant financial experience”The board appoints NEDs to the audit committee, but NEDs will be nominated by the directors, but like any board appointment will have to be voted on by the members in general meeting.
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