ICSB CS Professional key terms

A legal obligation requiring a director or officer to act in the company's best interests rather than personal ones, encompassing duties of care, loyalty, and good faith in decision-making.

The standard requiring directors to act with the diligence, skill, and prudence a reasonably careful person would exercise in comparable circumstances when making decisions for the company.

A judicial presumption that directors acted on an informed basis and in good faith, shielding reasonable decisions from liability even when outcomes later prove unfavorable.

The condition in which a majority of directors have no material relationship with the company or management, allowing objective oversight free from conflicts or undue influence.

A board member who holds no executive role and has no material financial or personal ties to the company, its management, or major shareholders beyond directorship.

A board member who is not part of the company's executive management team and whose role centers on oversight, challenge, and strategic guidance rather than day-to-day operations.

A smaller group of directors delegated specific oversight responsibilities, such as audit, risk, remuneration, or nomination, to deepen scrutiny beyond full board capacity.

A board committee, typically composed of independent directors, responsible for overseeing financial reporting, external audit, internal controls, and the relationship with auditors.

A board committee that identifies, evaluates, and recommends director candidates and oversees board succession planning, composition, and skills assessment.

A board committee that sets and reviews executive pay policies and packages, ensuring alignment with company performance and shareholder interests.

An internal control principle dividing tasks so no single person controls an entire transaction, reducing opportunities for error or fraud.

The policies, procedures, and systems a company uses to safeguard assets, ensure reliable reporting, and support compliance with laws and regulations.

The amount and type of risk an organization is willing to accept in pursuing its objectives, expressed in qualitative and quantitative terms to guide decisions.

The structured set of processes, responsibilities, and tools an organization uses to identify, assess, treat, and monitor risks across its operations.

A living document recording identified risks, their likelihood and impact ratings, assigned owners, and mitigation actions, used to monitor and prioritize risk management.

A governance structure where operational management owns risk, a risk or compliance function provides independent oversight, and internal audit gives independent assurance to the board.

An independent, objective function that evaluates the effectiveness of risk management, control, and governance processes and reports findings to the board or audit committee.

A situation where a director's or officer's personal interests, relationships, or outside roles could improperly influence decisions made on behalf of the company.

The reporting of suspected wrongdoing, misconduct, or illegal activity within an organization, typically through protected channels that shield the reporter from retaliation.

An organizational environment where employees feel safe raising concerns, questions, or misconduct reports without fear of reprisal, supported by leadership and clear policies.

The ethical signals and behavior demonstrated by senior leadership that shape the organization's culture, values, and commitment to compliance throughout the workforce.

A formal statement of the ethical principles and behavioral expectations the organization requires of directors, employees, and representatives in their daily work.

A written framework prohibiting the offering, giving, or receiving of improper payments or advantages, setting controls, due diligence, and reporting requirements for staff and agents.

A small payment made to a low-level official to secure or speed up routine action the payer is already entitled to; commonly prohibited under anti-corruption laws.

The process of vetting agents, intermediaries, and suppliers for corruption, sanctions, and integrity risks before and during the business relationship.

A transaction between the company and a director, officer, major shareholder, or entity connected to them, requiring disclosure and often independent approval.

The legal obligation of a director to declare any personal interest in a proposed or existing transaction and, where required, abstain from related board voting.

A doctrine holding that acts beyond the powers granted to a company by its constitution or law are invalid or unauthorized.

The governing document of a company setting out its internal rules, powers, and the rights and obligations of directors and shareholders.

The legal ability of a company to enter contracts and undertake activities, defined by its constitution and any statutory restrictions on its powers.

The mandatory registers and records a company must maintain, such as registers of members, directors, charges, and secretaries, available for inspection as required by law.

The official record of board and shareholder meeting proceedings, including attendees, resolutions, and decisions, retained as evidence of corporate actions.

The statutory record listing a company's shareholders, their shareholdings, and relevant dates, used to establish voting and dividend entitlements.

A formal decision adopted by the board of directors at a properly convened meeting or by written consent, recorded in the minutes as an authoritative corporate act.

The minimum number of directors or members who must be present for a meeting to validly transact business and pass resolutions.

The formal communication informing directors or shareholders of the date, time, place, and agenda of a meeting within the period required by law or the constitution.

The yearly gathering of shareholders required by law or constitution, where accounts are presented, directors elected, and ordinary resolutions voted upon.

The mechanism allowing a shareholder to appoint another person to attend and vote on their behalf at a meeting, subject to formal documentation requirements.

A shareholder vote, often advisory, on executive remuneration policy or the remuneration report, giving investors a formal voice on pay practices.

Campaigns by investors using voting, engagement, or public pressure to influence corporate strategy, governance, or board composition.

The structured process of identifying, communicating with, and responding to parties affected by the company, such as employees, customers, communities, and investors.

The process of determining which environmental, social, and governance issues are significant enough to affect stakeholder decisions and should be disclosed and managed.

A reporting approach presenting how strategy, governance, performance, and prospects create value over time across financial, human, social, and natural capitals.

A set of principles and provisions issued by a regulator or exchange setting recommended standards for board leadership, accountability, and shareholder relations.

A regulatory approach allowing companies to depart from a governance code provision provided they disclose and justify the deviation to shareholders.

The deliberate process of identifying and developing future directors and senior leaders to ensure continuity of skills, diversity, and effective oversight.