Governance Glossary

Common terms and definitions within Governance

  • 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.
  • 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 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 Effectiveness Review – Also known as, Board evaluation – A robust review assessing the board’s effectiveness, through structure, processes, people, and performance.
  • 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.
  • 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.
  • 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.
  • 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. 
  • ConstitutionAlso 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 StatementA 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.
  • 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.
  • Data ProtectionA 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.
  • 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.
  • 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.
  • 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. 
  • Hybrid AGM – An Annual General Meeting which takes place in-person and virtually simultaneously.
  • Incorporation – The process by which a new or existing business registers as a limited company.
  • Induction – The process of introducing a new individual into the organisation through a series of papers, meetings and training.
  • Internal Audit – Investigations and checks carried out by an independent assessor/body.
  • Listing Rules – The Listing Rules are a set of regulations applicable to any company listed on the London Stock Exchange.
  • 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.
  • 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.
  • Officer – A director or secretary of the corporation. A person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation.
  • Ordinary Resolution – The process by which members approve organisational decisions. The passing of an ordinary resolution required a simple majority.
  • Parent company or holding company – a company that has controlling interests (at least 51% of the share capital) in one or more smaller companies.
  • Person with Significant Control – An individual that owns or has significant influence over the organisation.
  • 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.
  • 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.
  • 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.
  • 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.
  • UK GAAP – Generally Accepted Accounting Practice in the UK (UK GAAP) is the body of accounting standards published by the UK’s Financial Reporting Council (FRC).
  • Virtual AGM – An Annual General Meeting held exclusively online, not in-person.
  • 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.

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