Accountability – An individual or organisation acknowledging and accepting responsibility for their actions and ensuring transparency when disclosing these to appropriate stakeholders.
Accounting reference date – The end of a limited company’s financial year and the date the accounts are made up to.
Agenda – A list of items, topics and matters to discuss. An agenda may also include timings, the type of input expected from attendees and the venue of the meeting. It is usually arranged in the order in which the business is to be conducted.
AGM – Annual general meetings are required to be held by public limited companies (plc’s) within 6 months of their financial year end. and a company’s members are able to attend and vote on the business of the meeting. Some other entities may also be required to hold AGMs as per their articles of association or constitutional documents.
AIM – The Alternative Investment Market. AIM is a submarket of the London Stock Exchange and enables smaller companies to gain access to capital from the public market. The listing requirements for AIM listed companies are much less onerous than the main market
Alternate – An individual who has been formally appointed to represent someone at meetings. This person assumes the responsibilities and duties of the appointor when acting in that capacity.
Annual Report – A report which is published yearly by an organisation for its shareholders. It documents its activities and finances in the previous financial year.
Articles of Association – Also known as, Constitution – A document which regulates an organisation’s operations and usually requires shareholder approval.
Audit – An official examination and evaluation of the financial information of an entity by an independent body (the Auditors) to ensure financial records are fair and accurate. There are certain criteria to meet for an audit to be required.
Audit Committee – A committee of the board of directors which oversees financial reporting and disclosure.
Board – The governing body of an organisation, elected by its ‘owners’. The board may go by many names including but not limited to, “The Board”, “The Board of Directors”, “The Committee” or “The Trustees”.
Board Committee – A sub-group of board directors with delegated responsibilities to focus on a particular aspect of the work of the board e.g. audit, remuneration, risk, carry out more in-depth reviews and provide the board with a summary of their findings for them to action as they see fit.
Board Effectiveness Review – Also known as, Board evaluation – A robust review assessing the board’s effectiveness, through structure, processes, people, and performance.
Board Meeting – A formal meeting of the board of directors of an entity. Commonly held at regular intervals throughout the year, to review the performance, address major problems and perform legal business. Directors must meet sufficiently often to ensure that they are discharging their duties as directors. Board meetings are required to be minuted (section 248 (1) Companies Act 2006).
Board Pack Efficiency – Streamlining the board papers which supports the board of directors, paper drafters and presenters to utilise their time most efficiently.
Board papers – A pack of papers prepared in advance, relevant to the agenda items of the Board meeting.
Board resolution – Decisions, agreements and actions made by the Board of Directors, during the Board meeting.
Board Skills Audit – A systematic assessment of the board’s overall and individual skillsets.
CA 2006 section 172 – Companies Act Section 172 – The Duty to Promote the Success of the Company. “A director of a company must act in the way [s]/he considers, in good faith, would be, most likely to promote the success of the company for the benefit of its members as whole, and in doing so have regard (amongst other matters) to – (a) The likely consequences of any decision in the long term (b) The interests of the company’s employees (c) The need to foster the company’s business relationships with supplies, customers, and others, (d) The impact of the company’s operations on the community and environment (e) The desirability of the company maintaining a reputation for high standards of business conduct (f) The need to act fairly as between members of the company”. Certain companies are required to report against s.172 on how they have complied with s172 in their annual report.
CGI – The Chartered Governance Institute UK & Ireland (previously ICSA). CGI is a global institution whose purpose is to champion good governance and develop the value, skills and effectiveness of company secretaries and governance professionals.
Chair – An individual, who is usually a non-executive, elected by the board of directors to preside over board meetings.
Charity Commission – The regulator of charities in England and Wales. The Charity Commission maintains the charity register.
Companies Act 2006 – The Companies Act 2006 is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law.
Company Secretary – A Company Secretary is a senior position within an organisation, responsible for several statutory duties, and usually with an advisory as well as an operational role.
Constitution – Also known as, Articles of Association –In corporate governance, an organisation’s constitution is a document which specifies the regulations for their operations and defines their purpose.
Confirmation Statement – A form filed annually with the Registrar of Companies in the UK and/or with the Charity Commission in the UK, confirming specified information and/or updating those details.
Conflict of Interest – A situation in which a person is in a position to derive personal benefit from actions or decisions made in their official capacity. Directors have a fiduciary duty to avoid conflicts of interest and have a duty to declare any conflicts of interest they may have.
Companies House – The United Kingdom’s registrar of companies. Entities that are registered under the Companies Act are required to file certain documents in order to comply with legislation, such as the annual financial statements and confirmation statements.
Corporate Governance Code – The UK Corporate Governance Code 2018 applies to all companies with a Premium Listing of shares on the the London Stock Exchange. It is a guide for board members and directors which sets out how they should approach governance in their company.
Corporate social responsibility (CSR) – It is a self-regulating business model that helps an organisation to be socially accountable to itself, its stakeholders, and the public. A focus now largely replaced by ESG.
D&O Insurance – Directors and Officers liability insurance. Covers the legal costs in defending a claim or investigations made against them personally by shareholders, investors, employees, customers, creditors or other third parties.
Data Protection – A set of rules which organisations must follow if their business stores or uses personal information. This applies to information kept on all stakeholders including but not limited to, staff, customers, clients, and account holders.
De Facto Director – An individual who assumes responsibility to act as a director, although was never actually appointed as such.
Diversity, Equity and Inclusion – A term used to describe policies and programs that promote the representation and participation of different groups of individuals, including people of different ages, races and ethnicities, abilities and disabilities, genders, religions, cultures and sexual orientations. This also covers people with diverse backgrounds, experiences, skills and expertise.
Dividends – The distribution of a sum of money out of an entity’s profits or reserves to its shareholders. Dividends can be distributed in the form of income, or additional shares in an entity
Directors Duties – A series of statutory, common law and equitable obligations owed by directors to the organisation.
Entity – A person or organisation possessing separate and distinct legal rights, such as an individual, partnership, company or corporation.
Executive Committee – A group of key senior managers that make decisions collectively about relevant subjects related to the organisation’s proper functioning. They are generally the highest level of authority within the hierarchical structure, below the Board of Directors.
Executive Directors – A member of the Board of Directors that also has responsibilities for management duties.
ESG –Environmental, social, and governance.
ESG Committee – A committee with delegated responsibility from the board to oversee environmental, social, and governance matters.
FCA – Financial Conduct Authority regulates financial services firms and financial markets in the UK to ensure that financial markets are honest, competitive and fair.
Financial Reporting Standards – International reporting standards providing principles for preparing financial reports and determining the type and amount of information that must be provided to users of financial statements.
Financial Year End – Often referred to as a fiscal year-end, this is the date that ends a one-year period for monitoring organisational finances.
FRC – Financial Reporting Council. The FRC maintain the role of regulating auditors, accountants, and actuaries and promotes transparency and integrity in business by setting codes and standards for accounting and actuarial work and taking enforcement action where necessary.
FTSE – The Financial Times Stock Exchange. FTSE 100 is a share index of the largest 100 companies by market capitalisation listed on the London Stock Exchange. FTSE 250 is a share index of the largest companies ranking 101 to 350 by market capitalisation listed on the London Stock Exchange.
GDPR – EU General Data Protection Regulation (EU GDPR) was a piece of legislation which came into effect in May 2018 and was introduced by the European Union. It aimed to improve the rights of individuals to understand how their personal data is processed and holding companies responsible for the way they handle and treat personal data. On 31 December 2020, following Brexit, GDPR was retained in domestic law as the UK General Data Protection Regulation (UK GDPR), but the UK now has the independence to keep the framework under review. The ‘UK GDPR’ sits alongside an amended version of the DPA 2018.
General Counsel – The chief lawyer of a legal department within an entity. The General Counsel will typically report to the CEO of the entity, and they will oversee any legal issues in all departments.
GM – General meetings. A general meeting is a formal meeting of an entity’s members which may be called by the directors to ask members to approve urgent matters or transactions that occur in between scheduled AGMs.
Going Concern – An organisation that is assumed will meet its financial obligations and therefore functions without the threat of liquidation for the foreseeable future.
Governance Professional – A chartered professional that provides advice and guidance to boards in areas such as law, accounting, finance, commerce, risk management, corporate governance, and board dynamics .
Governance Framework – An essential supporting structure of rules and practices by which the board ensures accountability, fairness and transparency in both the organisation’s operations and how it communicates with its stakeholders.
M&A – Mergers and Acquisitions activities are undertaken by entities to consolidate companies or major business assets through financial transactions such as purchasing another company or by acquiring its major assets.
Matters Arising – A schedule of matters that require some action from a previous board or committee meeting by a director or by management.
Matters Reserved – These are matters that can only be decided by the board of directors. The Corporate Governance Institute (CGI) provides a guidance note on its website on matters reserved for the board.
Member/s – Someone holding a share/or shares in an entity commonly referred to as a shareholder.
Memorandum of Association – A document that confirms the subscribers wish to form a company under the Companies Act and agree to become its first members.
Minutes – A legal and official record of a meeting.
Money laundering – The process of concealing the origin of money, which is usually obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source.
NED – Non-Executive Director (NED). A NED is not a part of the executive team, or involved in the day to day running of an entity and is usually independent. The focus of a NED is to oversee and provide challenge to the executive directors or management of the entity.
Nomination and Governance Committee – A committee with delegated responsibility from the board to review Board membership by leading the board nomination appointment process, advising on succession planning and executive appointments and responsibilities.
Notice of Meeting – A formal notification of a meeting detailing the date, time and place of a meeting, and what type of meeting it is. The notice usually includes the agenda.
QCA – The Quoted Companies Alliance brings small and mid-sized quoted companies together to build one voice to help create an environment where these businesses can grow and deliver sustainable long-term benefits for investors and wider society. The QCA has its own corporate governance code for AIM listed companies which can be downloaded from their website for a fee.
Quorum – The minimum number of members of a group or committee required to be in attendance in order for that group to be able to take official action.
Registered Office – The official address of a company (or limited liability partnership) registered with Companies House in the UK.
Remuneration – The pay or other financial compensation provided in exchange for an employee’s services performed.
Remuneration Committee – also referred to as Compensation Committee – A board committee whose delegated responsibilities may include setting remuneration for all executive directors and the chair (including pension rights and any compensation payments) and recommending and monitoring the level and structure of remuneration for senior management.
Resolution – A proposal made during a meeting of the company’s shareholders or directors.
RNS – Regulatory News Service (RNS) is a service to transmit regulatory and non-regulatory information published by companies that have their shares listed. RNS is owned by the London Stock Exchange. Companies that have a share listing are required to publish regulatory announcements in respect of their disclosure obligations under the Listing Rules and the Disclosure and Transparency Rules.
Seal – A device to emboss the organisation’s name, and usually the company registration number, onto documents.
Service Address – A service address is an address a director can chose to adopt as an alternative to using their residential address with Companies House in the UK.
Shadow Director – A director that has not been formally appointed but gives instructions which are usually followed.
Shareholder – Often referred to as a member – A shareholder is a person, company, or institution that owns at least one share of a company’s stock.
Shares – Shares are units of equity in an entity and may be purchased by investors. Anyone holding shares is referred to as a member or shareholder.
SID – Senior Independent Director (SID). The role of the SID is to act as a sounding board for the chairman and act as an intermediary for other directors. The SID also serves as a point of contact between members to address concerns or issues they feel have not been adequately dealt with through the normal channels.
Special Resolution – A decision passed by the shareholders of a company by a 75% majority.
Stakeholder – Individuals, groups or organisations with an interest or concern and/or directly involved with, or indirectly affected by an organisation’s decisions, projects, products and performance.
Statutory Filings – Documents that are required to be filed at Companies House such as annual accounts and confirmation statements. It is the responsibility of the entity’s directors to ensure that the statutory filings are filed on time. The company secretary, Secretariat or governance department is responsible for making statutory filings.
Statutory Registers – Entities are required to keep certain registers, such as registered directors and register of members. Private companies can elect to hold the information at Companies House or keep their own statutory registers at their registered office.
Subsidiary – An entity owned or controlled by another company, which is called the parent company or holding company.
Subscribers –One of the initial shareholders in a private limited company.
ToRs – Terms of Reference (ToRs). Certain matters can be delegated by the board of directors or executive management to a committee. ToRs determines the scope that the committee can act on behalf of the board or executive management.
Wates Principles – The Wates Corporate Governance Principles for Large Private Companies offers companies, that are not subject to a formal corporate governance code, an opportunity to demonstrate good corporate governance practices against a recognised framework. The Wates Principles apply to companies with more than 2,000 employees, turnover of more than £200m, and a balance sheet of more than £2bn that adopts the principles should apply and explain their approach to their own governance practices.
Whistleblowing – A reporting action taken by an individual that is aware of and concerned by activity taking place within an organisation which is deemed illegal, immoral, illicit, unsafe or fraudulent.
Written Resolution – A document that describes a company decision that is decided outside of a meeting and by written means, that is distributed to the required audience (shareholders/directors), with them able to sign and return it, confirming their agreement.