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Sources of Corporate Governance (Company legislation (The Companies Act…
Sources of
Corporate
Governance
The Listing Rules
(Focus on transparency and clarity. All companies wishing to trade their shares on the stock market must comply with those.)
The UK Corporate Governance Code and Irish Stock
Exchange Annex
(known as ‘
The Combined Code on
Corporate Governance
’)
Criminal law
The Criminal Justice (Theft and Fraud Related Offences) Act 2001
Criminal law on fraud and false accounting
Reporting requirements on auditors where they suspect offences may have been committed
The Companies (Auditing & Accounting) Act 2003
An individual may fulfil the role of the audit committee.
Role of the
Audit Committee
Ensure the integrity of financial statements
Monitor the company’s internal financial controls & audits
Oversee the appointment, removal and terms of engagement of external auditor and ensure his independence
Established the requirement to have an
audit committee
on
PLCs
All large private companies (balance sheet exceeding €25 million or turnover exceeding €50 million in both 2 last financial years)
Corporate Law Enforcement Act 2001
Imposed a number of obligations upon company directors regarding compliance with the Companies Acts
Established the ODCE
Company legislation
The Companies Act 2014
Aim
: to regulate the activities of companies
Makes being involved in fraudulent trading or insider trading a criminal offence
Requires companies to disclose certain information, e.g.: director’s share interest, substantial transactions involving non-cash assets, director’s total remuneration
Common law rules
(case law)
Company’s Constitution
LTDs
: Constitution
Contain rules in relation to behaviours of company’s participants and procedures they are required to comply with.
DACs/PLCs
: Memorandum & Articles of Association