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Corporate Governance

Forums › ACCA Forums › ACCA LW Corporate and Business Law Forums › Corporate Governance

  • This topic has 3 replies, 2 voices, and was last updated 11 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • March 13, 2014 at 2:29 am #162186
    dookhan12
    Member
    • Topics: 76
    • Replies: 61
    • ☆☆

    Hello sir, I have questions with regard to Corporate Governance.

    1. My dad me that directors service contacts should not exceeds “3” years without the approval of the shareholders.

    But I read in the UK Corporate Governance Code that “The code provides that service contracts and notice periods should not exceed 1 year”.

    Which is correct? Shouldn’t it be that directors service contracts should be 1 year long and the director should be subject to re-election by the shareholders in accordance with the Effectiveness section of the UK Corporate Governance Code?

    2. How should directors remuneration be decided?

    I know a remuneration committee should be set up with ONLY independent NEDs who set the remuneration of executive directors. The executive directors will set the independent NEDs remuneration or by a separate committee of the board.

    I am a little confused with the following sentence under the Remuneration section.
    “A significant proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.”

    3. What is the responsibility of the chairman and the CEO?

    Thanks!

    March 15, 2014 at 5:52 pm #162422
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    For the top 350 companies in the FTSE list all directors shall retire at each AGM.

    Service contracts shall not provide for a notice period of greater than one year from either side.

    A significant proportion of an executive director’s pay shall be based on performance of both the individual and of the company. The company may have performed excellently but, in the opinion of the remuneration committee, an individual director is not performing as well as could be expected.

    Equally, the company may have performed abysmally but, in the opinion …….. an individual has personally performed beyond expectations and the company would have done even worse but for that individual’s efforts

    Respective responsibilities of the chair and the CEO are fully covered within the recorded lectures. Please listen to those and, if you still have a problem, post again!

    March 16, 2014 at 12:15 am #162430
    dookhan12
    Member
    • Topics: 76
    • Replies: 61
    • ☆☆

    Thank you very much, I will listen to those lectures.

    March 18, 2014 at 8:45 pm #162628
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    You’re welcome – and that’s why the lectures are there!

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