BTF 2 - Chapter 12

The board of Castle plc, a premium listed company, is considering the status of Kate, one of the company’s directors. Kate may be determined as being independent if which of the following applies to her?

• Kate has not been an employee of the company within the last five years

• Kate has had a material business relationship with the company within the last three years

• Kate receives from the company additional remuneration above the fee for being a director

• Kate represents a significant shareholder

Which of the following is NOT one of the five main sections contained in the UK Corporate Governance Code?

• Board leadership and company purpose

• Composition, succession, and evaluation

• Company operations and performance

• Remuneration

Biz plc currently has a premium listing of the LSE. It has 12 board members, including the chair. How many independent non-executive directors should Biz plc have to comply with the Provision of the UK Corporate Governance Code?

• Three

• Four

• Six

• Eight

With regard to the board of directors of a premium listed company (excluding the chairman), the UK Corporate Governance Code requires that the proportion who are independent non-executive directors should be:

• between 10% and 24%

• between 25% and 39%

• between 40% and 49%

• 50% or over

Exon plc has a premium listing on the London Stock Exchange. In which of the following do the non-executive directors have a prime role?

• Setting the company’s strategic aims

• Providing entrepreneurial leadership

• Constructively challenging proposals on strategy

• Determining appropriate levels of remuneration for executive directors

Ricky’s performance as the Chair of Apax plc is due to be appraised in line with the UK Corporate Governance Code. This means that his performance will be evaluated by:

• The non-executive directors, taking into account the views of executive directors

• The executive directors, taking into account the views of non-executive directors

• The non-executive directors, not taking into account the views of the executive directors

• The executive directors, not taking into account the views of the non-executive directors

According to the Corporate Governance Code, the board should state the appropriateness of adopting the going concern basis of accounting in its financial statements:

• half-yearly only

• annually only

• annually and half-yearly

• only if the company fails to make a profit in a financial year

The audit committee should comprise:

• Only independent non-executive directors, at least one of whom should have recent and relevant financial experience

• Both independent and non-independent non-executive directors

• A balance of non-executive and executive directors

• Both non-executive and executive directors, at least one of whom should have recent and relevant financial experience

Sicon plc operates its own internal audit function. It chooses not to make use of an external supplier for these services. It is therefore vital that the company has arrangements to ensure that there is no compromise of the:

• Integrity of information security systems

• Independence of the internal auditors

• Stewardship of directors

• Rigor of financial reporting processes

Trent plc's Chief Executive Terence Darby has been appointed by the Board as its next Chair. The company has consulted major shareholders about this. It should set out its reasons for the appointment to all shareholders:

• At the time of appointment and in the next annual report

• At the time of appointment and also publish them on the company's website

• In the next annual report only

• At the time of appointment and in the next three annual reports.