On 18 October 2007, the Institute of Chartered Secretaries and Administrators (ICSA) published updated versions of several of its guidance notes which seek to help companies comply with the Combined Code on Corporate Governance. The ICSA guidance has been updated to reflect the June 2006 version of the Combined Code and perceived developments in best practice. Changes have also been made to deal with amendments to the Listing Rules, Prospectus Rules and Disclosure & Transparency Rules as well as certain aspects of the Companies Act 2006.
Terms of reference for audit, remuneration and nomination committees
The Combined Code requires that the board of relevant companies should constitute audit, remuneration and nomination committees. In order to assist companies with these aspects of the Combined Code, ICSA has published updated model terms of reference for such committees. Like the previous guidance (prepared in connection with the July 2003 version of the Combined Code), the terms of reference deal with, amongst other things, committee composition, procedural aspects, and the scope of delegated matters.
Schedule of reserved matters
A separate requirement of the Combined Code is that relevant companies should have a schedule of matters specifically reserved for the decision of the board as a whole (rather than being decided by, for example, senior management with delegated authority or a committee of the board). ICSA has also updated its guidance on this aspect of the Combined Code. The ICSA guidance is designed to assist boards (and company secretaries) by setting out a list of specific matters that might be considered appropriate to be reserved to the board. The guidance recognises that the particular matters which ought to be reserved will vary depending upon the size and nature of a company's interests and, accordingly, the suggested list is not necessarily exclusive or prescriptive.
The new guidance notes are available from the ICSA website.