Audit committee meaning

Checklist This checklist sets out principal matters to address when launching an internal inquiry into suspected criminal conduct. For fuller guidance, see Practice Note: How to plan and conduct an internal investigation. What is the purpose of the investigation? Prioritise fact-finding over determining liability. What is the scope of the investigation? Create clear terms of reference. Decide who should undertake the investigation and assign roles within the investigation. If Board members will be involved, verify whether a board resolution is required to authorise this. Take legal advice on likely Legal Professional Privilege (LPP) issues. Ensure the Board, or a duly constituted sub-committee, oversees the investigation and is identified as ‘the client’ in any engagement letter and/or correspondence with internal and/or external lawyers; keep written records of these decisions. If deploying internal audit, consider whether it was involved in the predicate events...

This Checklist outlines the requirements of the UK Corporate Governance Code and the Disclosure Guidance and Transparency Rules concerning the composition of audit committees in quoted companies, alongside best practice set out by leading representative bodies for institutional investors. It further reflects guidance issued by the Quoted Companies Alliance for small and mid-size quoted entities, and by the Association of Investment Companies for investment companies. The summary draws on the UK Corporate Governance Code (UKCG Code) to set expectations for committee make-up and expertise. Quoted companies (other than investment companies) The audit committee must consist of at least three independent non-executive directors, or two for smaller companies (ie those outside the FTSE 350). The chair of the board should not sit on the committee. The board should assure itself that at least one committee member has recent and relevant financial experience. As a whole, the audit committee should possess competence relevant to the sector in which the company operates... ...

ARCHIVED: This archived checklist outlines the ways in which the 2016 iteration of the UK Corporate Governance Code varied from the 2014 UK Corporate Governance Code. It is not updated and is supplied for background purposes only. Checklist—2014 UKCG Code and 2016 UKCG Code compared In April 2016, the Financial Reporting Council issued a fresh edition of the UK Corporate Governance Code (the 2016 UKCG Code) to incorporate changes arising from Regulation (EU) 537/2014 (EU Audit Regulation), Directive 2014/56/EU (Statutory Audit Amending Directive) and the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 (Statutory Audit Services Order). The 2016 UKCG Code applied to companies with accounting periods starting on or after 17 June 2016. This table sets out how the 2016 UKCG Code diverged from the text issued in 2014 (the 2014 UKCG Code); differences are shown using italics (inserted wording) and square brackets (removals): Provision 2014 UKCG Code 2016 UKCG Code Preface Language specific to...

In this issue: Horizon scanning Directors Status and worker categories Cross-border, international and jurisdictional issues Recruitment Protected characteristics Prohibited Conduct (discrimination etc) Diversity and gender pay gap Maternity, parents and carers Financial services and banking: employment issues Data protection and employee information Bribery, modern slavery, tax evasion and fraud Employment Tribunals Scotland Ireland LexTalk®Employment: a Lexis®Nexis community Dates for your diary Trackers New Q&As Employment resources on Lexis+® Daily and weekly news alerts Horizon scanning BTC launches call for evidence on Employment Rights Bill The Business and Trade Committee (BTC) has opened its first request for evidence for a new inquiry into the Employment Rights Bill (ERB). The inquiry will collect written and oral submissions to steer the Bill’s subsequent passage through Parliament and to gauge whether it is set to meet its stated aims. Written evidence should be submitted by Friday...

In this issue: Corporate governance Company law and regulatory matters Useful information Dates for your diary Weekly highlights from other practice areas Corporate governance GSK plc and BAE Systems plc unveil new directors’ remuneration policies FTSE100 groups GSK plc and BAE Systems plc have released updated directors’ pay frameworks within their 2024 annual reports, each proposing meaningful rises for their CEOs. GSK plc has emphasised that its chief executive’s overall package sits below the lower quartile of its global biopharma peer set across all compensation metrics, with the sole exception of base pay, where she remains below the median. Accordingly, the CEO’s base pay will rise by 5%, and her on-target annual bonus will move from one times to 1.5 times salary, with the cap remaining three times salary under the new arrangements. The CEO’s LTIP award maximum will lift from six to eight times base salary, with the 2025 award set at 7.25 times to reflect that...

In this issue: Planning Social housing Children’s social care Education Judicial review Environmental law and climate change Public procurement Governance Social care Daily and weekly news alerts New and updated content Planning Modernising planning committees—proposed reforms and implications On 28 May 2025, the Ministry of Housing, Communities and Local Government (MHCLG) opened a technical consultation on changes to planning committees in England, which runs until 23 July 2025. Sitting within implementation of the Planning and Infrastructure Bill, the measures are designed to update how planning choices are made. The package is intended to improve the efficiency, reliability and calibre of decisions nationwide. Through consistent delegation, streamlined committee arrangements, compulsory training and sharper performance measures, government intends to deliver a more agile planning service that underpins sustainable development and boosts economic growth. See News Analysis: Modernising planning committees—proposed reforms and implications. Planning reform working paper—reforming site thresholds The government has issued...

This Resource Note spotlights commentary, analysis and materials to aid interpretation and give practical guidance on applying Chapters 1, 1A, 1B and 1C of the Disclosure Guidance and Transparency Rules: DTR 1, DTR 1A, DTR 1B and DTR 1C respectively. Materials referenced here include, where pertinent: the Financial Conduct Authority (FCA) Handbook FCA Knowledge Base guidance—Procedural notes and Technical notes (constituting formal guidance and binding on the FCA) FCA consultation papers, discussion papers, policy statements, feedback statements and warnings Primary Market Bulletins and other FCA publications former UKLA technical and procedural notes and the UKLA newsletter List!, where still relevant to interpreting or applying a provision assimilated EU legislation EU Directives and EU Regulations, where relevant to interpreting a provision Lexis+ UK analysis and resources Setting the scene What it covers: DTR 1 sets out the Disclosure guidance, explaining its scope and purpose; DTR 1A sets out the transparency rules with their scope and purpose;...

UKCG Code, UK Listing Rules and DTRs The UKCG Code applies to companies that hold a listing of equity shares in the equity shares (commercial companies) category, whether incorporated in the UK or elsewhere, and it sets out provisions on the establishment of committees of the board. It requires the creation of an audit committee, and it also envisages that, in particular circumstances, companies with a listing of equity shares in the equity shares (commercial companies) category may wish to establish a separate risk committee. For further guidance on audit committees, see Practice Note: The audit committee. Under the Financial Conduct Authority (FCA) UK Listing Rules (UKLR), all companies with a listing of equity shares in the equity shares (commercial companies) category are required either to comply with the provisions of the UKCG Code or to explain to shareholders in their next annual report why they have not done so, reflecting the 'comply or explain' principle...

The purpose of internal control Internal control exists to support the identification, handling and mitigation of risk in settings where a company’s aims, internal organisation and the broader markets in which it operates are constantly shifting, adapting to changing conditions, and the risks it encounters will evolve over time and across cycles. Although a company cannot abolish these risks, a robust internal control system is central and fundamental to managing risks that are material to achieving its business objectives and to helping safeguard shareholders’ investment interests and the company’s assets and resources. Under the Financial Reporting Council’s UK Corporate Governance Code (UKCG Code), the board of a premium listed company must establish processes to manage risk effectively, oversee the internal control framework, and define the nature and scale of the principal risks it is prepared to assume in pursuing its strategic objectives. In addition, the Disclosure Guidance and Transparency Rules (DTRs) require an issuer to make a range of disclosures about internal control and risk management systems within its...

subscription and shareholders’ agreement/investment agreement Insert new definitions: A Ordinary Shares; Board; Chair (per clause reference); Investor Consent/Investor Direction (written consent by the Lead Investor or holders of at least [75]% in nominal value of A Ordinary Shares); Investor Director; [Lead Investor]. Add a clause granting Investors the right at any time to appoint and remove non-executive Investor Director[s] and a non-executive Chair by written notice (first appointments effective on Completion), appoint alternates, disapply retirement by rotation, and secure fees of £[amount] p.a. plus VAT and expenses. Establish post‑Completion [remuneration and audit] committee[s] with casting vote rights. articles of association Add definitions for A and B Ordinary Shares, Preference Shares, Investor, Investor Group, Investor Associate, Investor Director, Investor Consent/Direction, Investor Director Interest, Group Company Interest, Co‑Investment Scheme, Confidential Information, FSMA, Fund, Lead Investor, Recognised Investment Exchange, Quotation and Sale. New articles set Board size; permit alternates; regulate meetings, quorum and remote participation; enable authorisation of conflicts and Investor Director/Group Company interests with disclosure and, if directed, A...

Health and safety Please supply, where relevant, records covering: Health and safety policy; certifications (ISO 45001/45004, contractor accreditation); contents/index of the management system. Risk-based documentation: sample risk assessments (incl. explosion); COSHH inventory and assessments (SI 2002/2677); COMAH notifications, Major Accident Prevention Policy and, where relevant, Site Safety Report (SI 2015/483). Asbestos: surveys, register, management plans, clearance certificates, periodic checks, or basis confirming no asbestos. Fire safety: risk assessment and actions; inspection/maintenance of alarms, emergency lighting, extinguishers/sprinklers, smoke vents, dry/wet risers. Electrical and gas: most recent fixed‑wiring inspection and actions; latest gas plant service records. Water hygiene: legionella risk assessment/audit and management records (treatment, tank cleans, temperature checks); cooling tower/evaporative condenser notifications to the local authority. Lifting and machinery: inspection/test records, machinery safety assessments and example periodic/pre‑shift checks. Occupational exposure: noise surveys and airborne monitoring for any specified chemicals; ionising radiation records (personal dosimetry, authorised users, local rules, safety audit, risk assessment). Incidents and claims: accident/incident/near‑miss records for six...

1 Decide who should conduct and support the investigation General counsel should determine the most suitable way to run the investigation, though they may form a dedicated committee including appropriate board or audit committee members. Identify a ‘client contact’ as the primary liaison within the company. This person must be senior enough to issue instructions and make decisions for the business, and must have no involvement in the alleged conduct. Consider whether to appoint: external legal advisers to reinforce the (perceived) independence and integrity of the investigation and to provide a stronger basis for legal professional privilege (LPP); an external data vendor to collect and process relevant material and assist with forensic tasks, such as recovering deleted data where required; media relations experts to help deliver effective public messaging and to monitor the impact of any adverse press. ...