Chap 12

Portmanteau plc aims to comply with the UK Corporate Governance Code. There are to be six members of the company’s nomination committee, so the number of independent non-executive directors on the committee must be at least:

• Two.

• Three.

• Four.

• Six.

Hatfield plc is a small listed company inside the FTSE 350 that holds a premium listing. According to the UK Corporate Governance Code, how often should it hold a formal and rigorous evaluation of the board’s performance?

• Annually.

• Every two years.

• Every three years.

• Every five years.

Marchant plc is a premium listed company. Which of the following statements about its compliance with the UK Corporate Governance Code is true?

• It must comply with all the requirements of the Code.

• It may, in particular circumstances, depart from the principles and provisions of the Code.

• It can be flexible in how it applies the Code.

• It is not affected by the requirements of the Code.

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

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

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

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

• Katy 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.

According to the UK Corporate Governance Code, how many members on the board of a premium listed company should be independent Non-Executive Directors?

• Maximum 3 members.

• At least 2 members.

• At least half the board, excluding the Chair.

• Maximum 2 members.

According to the UK Corporate Governance Code, in a premium listed company, a non-executive director (NED) cannot be classified as an independent NED, if:

• The director worked as an employee for the company more than 5 years ago.

• The director has not a close family relationship with any of the company’s advisers. Directors or senior employees.

• The director takes part in a performance-related pay scheme.

• The director holds an insignificant proportion of the company’s shares.

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.

The requirement for an annual re-election of directors applies to:

• all directors.

• all executive directors only.

• all executive directors and non-executive directors who have served nine years.

• all non-executives who have served nine years.

According to the UK Corporate Governance Code, a company should seek to improve corporate governance by ensuring that:

• the chairman and chief executive are the same individual to avoid confusion over who has responsibility for running the company.

• the chairman and chief executive are different individuals to prevent one person from having too much power in a company.

• the chairman and chief executive are different individuals in case one dies or becomes incapacitated by ill health.

• the company chairman does not take up outside directorship.