Financial Crime World

Corporate Governance in [Company Name]

In accordance with good market practice and regulatory requirements, [Company Name]’s Board of Directors is committed to upholding the highest standards of corporate governance. This article provides an overview of the company’s governance structure, responsibilities, and practices.

Board Composition and Independence

The Board consists of non-executive directors who are independent from the company’s executive management team. A large shareholder is defined as holding at least 10% of the total number of shares or voting rights. In accordance with the Companies Act, not more than one Board member may be a member of the executive management team.

Remuneration and Shareholding

Non-executive Board members do not participate in executive incentive plans and typically receive remuneration only through cash payments determined by the annual general meeting. The company’s remuneration policy is subject to approval by shareholders at each annual general meeting. Service contracts with Board members for services outside of their Board membership may be put in place by the Board, subject to the executive remuneration policy.

Disclosure and Transparency

  • The company is required to disclose information about its Board members’ and CEO’s shareholdings on its website.
  • Under the Market Abuse Regulation (MAR), persons discharging managerial responsibilities (PDMRs) and their closely associated persons must notify the SFSA and the company of transactions conducted in the company’s listed shares or debt instruments.

Board Meetings and Decision-Making

  • The Board meets regularly to discuss and make decisions on various matters.
  • The Companies Act sets out the quorum for a meeting to be validly held, as well as requirements for notice and supporting documentation.
  • A quorate Board may also meet at short notice in exceptional circumstances.
  • The principal duty of the Board is to act in the best interest of the company.
  • Under the Companies Act, the Board must ensure that the company’s organisation is structured to enable control of its finances and monitor its financial position.

Key Challenges and Responsibilities

  • Integrating environmental, social, and governance (ESG) considerations into its decision-making process.
  • Balancing the interests of various stakeholders, including employees, customers, suppliers, and the wider community.
  • The company’s strategy is set by the Board, which must consider the long-term interests of all stakeholders.

Indemnification and Insurance

  • The company may not indemnify its directors for their liability to the company.
  • Directors’ and officers’ liability insurance is permitted.

Stakeholder Engagement

  • While there are no mandated disclosures or actions required in relation to stakeholder engagement, the Board has a responsibility to consider the interests of stakeholders other than shareholders when making decisions.
  • The company’s sustainability report provides insight into its approach to ESG issues and stakeholder engagement.

Employee Representation

  • Where the average number of employees was at least 25 during the most recent financial year, employees are entitled to appoint two members and two deputy members of the Board.
  • Employee representatives have the same rights and duties as non-employee directors, subject to certain additional limited requirements concerning conflicts of interest.

By upholding these principles and practices, [Company Name] is committed to maintaining a strong corporate governance framework that benefits all stakeholders.