ICSB CS Professional cheat sheet

Board duties split into two categories: duty of care (informed, diligent decision-making) and duty of loyalty (good faith, no self-dealing); both are fiduciary in nature.

Business judgment rule: courts defer to directors who acted on an informed basis, in good faith, and with no conflict of interest; it is a shield, not a defence of outcomes.

Independence test: a director is independent only if free of material relationships with the company, its management, or major shareholders; tenure and fees are common disqualifiers.

Quorum rule: no valid meeting or resolution without the quorum fixed in the articles or bylaws; a resolution passed without quorum is voidable.

Conflict protocol: interested director declares interest, is counted for quorum only if permitted, and abstains from voting; the chair records the declaration in the minutes.

Board composition levers: size, staggered vs. annual election, separation of chair and CEO, lead independent director, and committee structure.

Committees that carry delegated authority: audit, remuneration, nomination, risk; delegation does not extinguish board accountability.

Meeting decision rule: notice must be adequate, agenda and papers circulated in advance, and dissent recorded; silence in minutes is treated as assent.

Separate legal personality: a company is a legal person distinct from shareholders; liability of members is limited to unpaid amounts on shares unless piercing applies.

Ultra vires and capacity: acts outside the objects clause may bind the company to third parties who acted in good faith, but remain an internal breach of duty.

Capital maintenance doctrine: distributions to shareholders are lawful only from distributable profits or a permitted capital reduction procedure.

Statutory filing deadlines are strict liability obligations; late filings typically attract automatic penalties regardless of intent.

Directors' statutory duties commonly codified: act within powers, promote company success, exercise independent judgment, exercise reasonable care and skill, avoid conflicts, refuse third-party benefits, declare interests.

Insolvency trigger: once directors know or ought to know the company cannot avoid insolvent liquidation, they must act in creditors' interests; wrongful trading tests knowledge, fraudulent trading tests intent.

Shareholder approval thresholds: ordinary resolutions generally require a simple majority; special resolutions typically require 75 percent where that model is used.

Regulatory compliance programme elements: risk assessment, policies, training, monitoring, whistleblowing channel, and documented remediation.

Statutory registers to maintain: members, directors and secretaries, charges, debenture holders, and beneficial ownership where required by local law.

Minute-keeping rule: minutes are prima facie evidence of proceedings; record date, venue, chair, attendance, quorum, resolutions, and dissent.

Resolution types: board resolutions for management matters; shareholder ordinary and special resolutions for constitutional or capital changes.

Share transfer process: instrument of transfer, stamping where required, board approval, registration, and issue of a new certificate within statutory time.

Dividend procedure: recommend by board, declare by shareholders where required, establish record date, pay within statutory period, retain unclaimed amounts per law.

Company seal and execution: deeds and certain instruments require execution in the manner prescribed by the constitution, often two authorised signatories.

Annual compliance calendar: annual return, financial statements, tax filings, register updates, and confirmation statements each with distinct deadlines.

Record retention: minutes and registers are generally kept permanently or for long statutory periods; accounting records for a defined minimum term set by law.

Comply-or-explain model: listed companies either meet a code provision or disclose and justify non-compliance; the explanation is the enforcement mechanism.

Apply-and-explain variant: entities apply principles proportionately and explain departures, common in principle-based codes.

Typical code provisions: board balance and independence, separation of chair and CEO, audit committee of independent directors, annual board evaluation, and disclosure of remuneration policy.

Stakeholder vs. shareholder orientation: codes increasingly require disclosure on workforce engagement, suppliers, and environmental and social matters.

Say-on-pay: advisory or binding shareholder vote on executive remuneration, often triennial on policy and annual on implementation.

Board evaluation cycle: internally facilitated annually with externally facilitated review at intervals set by the code.

Disclosure location: governance statement inside the annual report, cross-referenced to the code and to the audit committee report.

Codes are soft law; listing rules, securities law, and company law supply the binding obligations that sit behind them.

COSO-style control components: control environment, risk assessment, control activities, information and communication, and monitoring activities.

Three lines model: management owns risk, a risk and compliance function provides oversight, internal audit provides independent assurance.

Risk formula: risk = likelihood x impact; heat maps rank inherent risk before controls and residual risk after controls.

Control types: preventive vs. detective; manual vs. automated; entity-level vs. transaction-level; segregation of duties is a core preventive control.

Risk appetite statement sets the amount and type of risk an entity accepts; risk tolerance is the acceptable variation around that appetite.

Control testing: design effectiveness first, then operating effectiveness via sampling; deficiencies escalate to significant deficiency or material weakness.

Fraud triangle: pressure or incentive, opportunity, and rationalisation; controls target opportunity primarily.

Key risk indicators are forward-looking metrics with defined thresholds that trigger escalation before loss events occur.

Core ethical principles for governance professionals: integrity, objectivity, confidentiality, professional competence and due care, and professional behaviour.

Conflict of interest rule: disclose, step back from the decision, and record the recusal; disclosure alone does not cure a material conflict.

Bribery elements: a financial or other advantage, offered or received, with intent to induce improper performance of a relevant function.

Facilitation payments are small payments to speed routine action; they are illegal under several major anti-corruption statutes and must not be treated as permissible.

Third-party risk: agents and intermediaries are the highest-risk channel; apply risk-based due diligence, contractual anti-bribery clauses, and payment controls.

Gifts and hospitality: register, set value thresholds, require pre-approval above the threshold, and prohibit cash and anything influencing a decision.

Whistleblowing standards: independent reporting channel, anonymity where lawful, protection from retaliation, and documented investigation.

Professional scepticism: verify rather than accept representations; document the basis of judgment so conduct is defensible after the fact.

Shareholder rights: receive notice, attend and vote, appoint proxies, receive dividends, inspect registers where permitted, and bring derivative or unfair prejudice claims.

Proxy machinery: notice of meeting must be accompanied by adequate information; proxy forms must allow directed voting and a withhold option.

Majority rule with minority protection: the majority decides, but oppression remedies and related-party approval rules protect minorities.

Engagement channels: annual general meeting, results presentations, investor roadshows, written Q&A, and dedicated investor relations contact.

Stewardship codes require institutional investors to disclose voting policies, monitor investee companies, and report how they voted.

Material disclosure rule: price-sensitive information is released to the market as a whole, not selectively, and insider lists are maintained.

Stakeholder mapping: identify salience by power, legitimacy, and urgency; tailor engagement intensity accordingly.

Activist and proxy contest readiness: know the shareholder register, monitor beneficial ownership thresholds, and maintain a crisis communication plan.