ICSA's new terms of reference for audit committees—the changes in detail

ICSA's new terms of reference for audit committees—the changes in detail

Corporate analysis: Lexis®PSL Corporate gives a comprehensive summary of changes in ICSA’s latest version of its guidance and terms of reference for the audit committee.

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ICSA: The Governance Institute has recently updated its guidance note and terms of reference for audit committees. Key changes are:

  • Overlaps between committees—extra 'common sense' guidance has been given regarding the links and importance of liaison between the responsibilities of different board committees and the necessity for each board committee to have full knowledge of the deliberations of other committees through reports to the board (page 2)
  • Membership—a new requirement stating that the committee shall comprise, where possible, one member of the remuneration committee (in addition to the inclusion of one member of the risk committee) (term 1.1, page 6)
  • Extensions of membership—removal of previous term 1.4 which said that 'appointments to the committee shall be for a period of up to three years extendable by no more than two additional three-year periods, so long as members continue to be independent' (page 6)
  • Electronic form—a new term allowing notices, agendas and supporting papers to be sent in electronic form where the recipient has agreed to receive documents in such a way (term 5.3, page 8)
  • Annual general meeting—a broadening of term 7 to require the committee chairman to attend the annual general meeting to answer all shareholder questions rather than just those 'relating to

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About the author:

Eleanor trained at Nabarro LLP and qualified in their Corporate team, where she worked on a wide range of corporate transactions and general company advisory matters. She also gained in-house experience on secondments to clients of the firm.

Eleanor’s specific experience includes advising on reductions of capital, striking-off and dissolution, public company takeovers (including by way of scheme of arrangement), general meetings of listed, unlisted and private companies, group reorganisations, share buybacks and private company share and asset sales and acquisitions.