Under the UK Corporate Governance Code, which of the following arrangements for a listed company's board goes against the Code?
Answer and explanation
Correct answer: D. The same person is both the chair of the board and the chief executive
- Step 1: The Code separates the roles of chair (leading the board) and chief executive (running the business).
- Step 2: One individual holding both would concentrate power.
- Step 3: The other arrangements follow the Code.
Answer
The same person is both the chair of the board and the chief executive.
Why not the others: The Code expects at least half the board, excluding the chair, to be independent non-executives, so this complies. The Code expects an audit committee of independent non-executive directors. The Code expects a remuneration committee to set executive pay, and this complies.
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