Acca aaa s21 Notes

Composition, Succession and Evaluation
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Appointments to the board should be subject to a formal, rigorous and transparent procedure 
led by a nomination committee. A majority of the committee should be independent NEDs.
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The board and its committees should have a combination of skills, experience and knowledge.
The length of service of the board as a whole should be considered and membership regularly 
refreshed. The post of chairman should not be held beyond 
nine years
.
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The board should undertake a formal and rigorous annual evaluation of its own performance 
and that of its committees and individual directors.
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All directors should be submitted for re-election annually.
Audit, Risk and Internal Control
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The board should establish formal and transparent policies and procedures to ensure the 
independence and effectiveness of internal and external audit and the integrity of financial 
statements.
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The board should present a fair, balanced and understandable assessment of the company’s 
position and prospects. The financial statements should state whether the board considered 
the appropriateness of the going concern basis of accounting and identify any material 
uncertainties for at least 
12 months
from the date of approval of the financial statements.
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The board should establish procedures to manage risk, oversee internal controls and determine 
the nature and extent of the principal risks the company is willing to take to achieve its long-
term strategic objectives.
To meet the above Principles, the board should establish an audit committee of at least 
three
independent NEDs (two for smaller companies). At least one committee member must have recent 
and relevant financial experience.
September 2021 to June 2022 exams
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Remuneration
In essence, remuneration should be sufficient to attract, retain and motivate directors of sufficient 
quality… but avoid paying more than is necessary.
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Remuneration policies and practices should be designed to support strategy and promote long-
term sustainable success. For example, a significant proportion of executive directors’ 
remuneration may be structured to link rewards to corporate and individual performance. In 
other words, profit-related pay is encouraged. Directors should not receive high pay irrespective 
of company performance.
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There should be a formal and transparent procedure for developing policy on executive 
remuneration and for fixing the remuneration packages of individual directors. No director 
should be involved in deciding his or her own remuneration. This means that a remuneration 
committee (NEDs) should be formed to fix directors’ remuneration.