QCA Corporate Governance Code or QCA Code meaning

This checklist outlines the UK Corporate Governance Code expectations for the make-up of remuneration committees of quoted companies, alongside leading best practice from principal institutional investor bodies... UK Corporate Governance Code (UKCG Code) The remuneration committee should include a minimum of three independent non-executive directors, or two for smaller companies (those outside the FTSE 350)... The company chair may sit on the committee but must not chair it, provided he or she was judged independent at the time of appointment as chair... Before taking up the role of remuneration committee chair, the individual should have served on a remuneration committee for at least 12 months... References: 2018 UKCG Code, Provision 32; 2024 UKCG Code, Provision 32... Institutional Shareholder Services Inc (ISS) For FTSE 350 companies, the remuneration committee should comprise at least three non-executive directors, with all members being independent... The company chair may join the committee but must not chair it, if he or she...

Meaning of ‘non-executive director’ The broad definition of ‘director’ is not closed. Under the Companies Act 2006 (CA 2006), a director is any person who occupies the office of director, whatever title they hold. Accordingly, this covers both executive and non-executive directors (NEDs). Executive directors are typically authorised, either by the company’s constitution or by authority delegated from the board, to manage the company’s day-to-day affairs, and they usually have a full-time service contract. NEDs generally: have no executive powers play a pivotal role in the company’s corporate governance are not employees of the company There are a number of challenges around granting shares to NEDs. This Practice Note considers the issues to assess when offering shares or share-based remuneration to NEDs, including: the potential impact on the NED’s independence the share dealing provisions of Assimilated Regulation (EU) 596/2014 for the UK, and the Market Abuse Regulation (Regulation (EU) 596/2014) previously and for the EU ...

Under the Companies Act 2006 (CA 2006), there are rules governing payments a company makes to a director by way of compensation for loss of office. Because these arrangements are especially susceptible to misuse, they must be approved by shareholders. Their interplay with the general statutory duties of directors is addressed in Practice Note: Directors' duties—scope, nature, interpretation and application. Among those duties is an obligation to inform the board whenever the director has, directly or indirectly, any interest in a proposed transaction or arrangement with their company, specifying the nature and extent of that interest. In relation to: the requirement to disclose an interest in a company transaction or arrangement, see Practice Note: Declaration of a director's interests—the statutory provisions; a director’s ability to participate, whether as a director or as a member, in decisions on such a transaction or arrangement, see Practice Note: Declaration of a director's interests—articles of association For these purposes, ‘director’ covers anyone occupying the role of...

STOP PRESS: On 22 January 2024, an updated UK Corporate Governance Code (the 2024 UKCG Code) was released. It introduces only limited alterations to the current UKCG Code issued in 2018 (the 2018 UKCG Code). The 2024 UKCG Code applies to accounting periods beginning on or after 1 January 2025, save for Provision 29, which relates to the requirement for a board declaration on internal controls and applies to accounting periods beginning on or after 1 January 2026. In addition, the best practice guidance that accompanied the 2018 UKCG Code has been brought together into a single digital resource to sit alongside the 2024 UKCG Code. For further information, see News Analysis: UK Corporate Governance Code 2024 published—what’s changed? Definition Under section 271 of the Companies Act 2006 (CA 2006), a public company must appoint a company secretary who has the appropriate knowledge and experience and holds certain specified qualifications. A private company is not required to appoint a company secretary unless its articles of association provide...