GIA Cert Governance Practice flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Corporate governance definition

The system by which companies are directed and controlled, allocating rights and responsibilities among board, managers, shareholders, and stakeholders.

Comply or explain

A regulatory approach where companies must either comply with code provisions or explain in their annual report why they have not.

Board independence

Under the UK Code, at least half the board excluding the chair should be independent non-executive directors for FTSE 350 companies.

Chair and CEO separation

The UK Corporate Governance Code requires a clear division of responsibilities between the chair and chief executive, and the chair should not be the CEO.

Audit committee composition

Premium-listed companies must have an audit committee of at least three independent non-executive directors (or two for smaller companies).

Directors' duty to promote success

Under s.172 Companies Act 2006, directors must act in good faith to promote the success of the company for the benefit of members as a whole.

Board evaluation frequency

FTSE 350 companies should conduct an external board evaluation at least every three years, with annual internal evaluations in between.

s.172 stakeholder duty

Directors must have regard to employees, suppliers, customers, community, and environment when promoting the success of the company.

Risk appetite

The amount and type of risk an organisation is willing to accept in pursuit of its objectives, often expressed as qualitative and quantitative statements.

Residual risk

The level of risk remaining after controls and mitigation measures have been applied, as opposed to inherent risk before controls.

Three lines model

A risk governance structure: first line owns risk, second line provides oversight and compliance, third line is independent internal audit assurance.

COSO ERM components

The 2017 COSO ERM framework has five components: governance and culture; strategy and objective-setting; performance; review and revision; information, communication, and reporting.

Risk register

A document listing identified risks with owners, likelihood, impact, risk rating, mitigation actions, and review dates for monitoring.

Key risk indicator

A metric providing early warning of increasing risk exposure; should be measurable, relevant, and timely to support proactive risk management.

Business continuity standard

ISO 22301 specifies requirements for a business continuity management system, covering planning, implementation, operation, monitoring, and improvement.

Risk treatment options

Four main responses to risk: avoid, reduce (mitigate), transfer (e.g., insurance), or accept, chosen based on risk appetite and cost-benefit.

Compliance function role

Monitors regulatory changes, advises the business, provides training, conducts compliance risk assessments, and reports to the board or audit committee.

UK Bribery Act adequate procedures

A defence for commercial organisations to the strict liability offence of failing to prevent bribery, requiring proportionate procedures, top-level commitment, risk assessment, due diligence, communication, and monitoring.

Market abuse offences

Under UK MAR, prohibited conduct includes insider dealing, unlawful disclosure of inside information, and market manipulation, with requirements to disclose inside information promptly.

UK GDPR breach notification

Personal data breaches must be reported to the Information Commissioner's Office within 72 hours where they are likely to result in a risk to rights and freedoms.

Anti-money laundering CDD

Customer due diligence requires identifying and verifying customers and beneficial owners, understanding purpose of relationship, and ongoing monitoring on a risk-based approach.

Suspicious activity report

A report to the National Crime Agency by a nominated officer when there is knowledge or suspicion of money laundering, enabling consent or defence.

Compliance monitoring plan

A risk-based schedule of compliance reviews and testing; findings must be tracked to remediation with assigned owners and deadlines.

Whistleblowing protection

The UK Public Interest Disclosure Act 1998 protects qualifying disclosures; organisations should provide independent, confidential reporting channels and a whistleblowing policy.

Company secretary core duties

Advise the board on governance, ensure statutory and regulatory compliance, manage board meetings, and maintain statutory registers and records.

Statutory registers

UK companies must maintain registers of members, directors, secretaries, charges, and people with significant control, available for inspection.

Board meeting minutes

Should record date, time, place, attendees, apologies, conflicts declared, decisions made, and actions with owners; minutes are prima facie evidence of proceedings.

AGM notice period

UK public companies must give at least 21 clear days' notice of an annual general meeting; private companies may not need to hold one.

Confirmation statement deadline

UK companies must file a confirmation statement with Companies House within 14 days of the end of the review period.

Accounts filing deadline

UK private companies must file annual accounts within 9 months of the accounting reference date; public companies within 6 months.

Directors' conflicts authorisation

Under s.175 Companies Act 2006, conflicts may be authorised by independent directors if the articles permit; a conflicts register should be maintained.

Dividend declaration process

The board recommends a final dividend for shareholder approval at the AGM or declares an interim dividend; distributable profits and solvency must be confirmed.