Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Introduction/Purpose
This glossary has been produced as an aide memoir for company secretaries, charity secretaries
and students studying for the ICSA qualification, as well as a definition of key terms for
people who are not familiar with the roles of company and charity secretaries. There are
several glossaries in the not-for-profit sector and a glossary in the Higgs Report into the
Effectiveness of Non-Executive Directors (Jan 2003) (the Higgs Report) for the corporate
sector. There is not, however, a standardised glossary that bridges all sectors of the UK
economy, or that assumes little or no knowledge of the professional activities of Chartered
Secretaries. It is hoped that this glossary will be informative for all sectors and give a good
understanding of the key words to people who may have only a little or no knowledge of the
profession or practice.
Term
Abstention
Accountability
Acquisition
Definition
See Voting.
Accountability is the unavoidable duty to explain the ways in which an
individual or group has carried out, or caused to be carried out, the
obligations placed upon him or them by law, a governing body or
constitutional document. While the discharge of these
activities/obligations may be delegated to others, the obligation to
account for (ie remain accountable for) the actions cannot be
delegated.
For more information please refer to the ICSA Handbook of Good
Boardroom Practice 2nd edition
and the ICSA Best Practice Guide: Improving Accountability in Charitable
Organisations.
The purchase of an asset eg plant or a company. In the latter case this
is usually achieved by buying the shares of another company. If the
purchaser in pursuance of a takeover acquires 90% of the shares in the
company then a compulsory acquisition of the remaining shares could
be made.
Hostile Takeover/Contested Takeover A takeover bid where the board of
the target organisation does not recommend it to the shareholders.
Merger Organisations coming together voluntarily to seek benefits of
synergy
The Charities Act 2006 S.75C (4) describes a merger for charities as:
a) a merger of two or more charities in connection with which one of them (the
transferee) has transferred to it all the property of the other or others, each of which
(a transferor) ceases to exist, or is to cease to exist, on or after the transfer of its
property to the transferee, or
(b) a merger of two or more charities (transferors) in connection with which both
or all of them cease to exist, or are to cease to exist, on or after the transfer of all of
their property to a new charity (the transferee).
Takeover The act of buying a company by purchasing over 50% if its
shares; or the process of acquiring another organisation through
negotiation or by increasing on existing holding to over 50%.
Ad Hoc Committee
Agenda
See Committee.
A programme of items to be discussed at a meeting. Items of business
on the agenda are placed (usually) in the order that they will be
discussed in the meeting.
Consent Agenda - where there are a few items that do not need any
discussion or debate either because they are routine procedures or are
already have unanimous consent. A consent agenda allows the board to
approve all these items together without discussion. They are only
discussed if there is a particular matter raised by an individual director
or trustee.
Timed Agenda - an agenda which specifies the amount of time to be
dedicated to each item.
See Meeting.
The formal financial statement issued yearly by an organisation. The
annual report shows assets, liabilities, revenues, expenses and earnings,
how the organisation stood at the close of the business year, how it
fared profit-wise during the year, as well as other information of
interest to shareholders.
For more information on the standard for annual reports please see
these websites.
ASB - www.frc.org.uk/asb/
IASB - www.iasb.org/Home.htm
The annual report must contain a report by the trustees or board of
directors on the activities of the organisation during that year, and such
other information relating to the organisation or to its trustees or
officers, as may be prescribed by regulations made by the Secretary of
State or in legislation affecting companies, charities, NHS trust and
Foundation Trusts etc.
For more information on the standard for annual reports please see
these websites.
Monitor - www.monitor-nhsft.gov.uk/
Charities: SORP - www.charitycommission.gov.uk/investigations/sorp/sorp05docs.asp
For further information see www.audit-commission.gov.uk/caa/
Ballot
Benchmarking
Best Practice
Board
Budget holder
Business Ethics
Business Plan
Bye-Laws
Cadbury Report
Certificate of
incorporation
Chair, Chairman,
Chairperson
Charitable Incorporated
Organisations (CIO)
Charity
See Secretary.
The senior executive officer responsible to the organisations board for
ensuring that decisions are implemented and that the organisation
functions effectively and efficiently.
Sometimes interchangeable with the role of managing director but
both roles may exist in some organisations although it is rare.
The CEO is an executive director of the board of directors, except
within charities (in general); in NHS FTs and other NHS Trusts they
are also the Accounting Officer. (Monitor - www.monitornhsft.gov.uk/ )
For more information see ICSA Guidance Note: Roles of the Chairman,
Chief Executive and Senior Independent Director under the Combined Code
Combined Code
Committee
Community Interest
Companies (CIC)
The Compact
Company
A CIC is also a separate legal entity and so its guarantors will only be
liable for their guarantee if it is formed by guarantee. If it is formed
through shares then the shareholders are not personally liable.
For further information see ICSA Best Practice Guide: Community Interest
Companies.
Company Limited by Guarantee - A corporate vehicle used by a variety of
organisations, but best suited to undertakings where no division of
profit is contemplated, for example, non profit making associations
such a charities, research associations and organisations such as
sporting clubs supported by private subscriptions.
The benefits of a CLG are that the member agrees to pay a fixed
amount (often 1) to the company, in the event of being called upon
to do so (the Guarantee). The CLG is a legal person in its own right
and so members do not take on the CLG debts and liabilities except
to the total amount of the Guarantee given by the member should the
CLG be wound up and have insufficient funds to meet its debts.
For more information see the ICSA Best Practice Guide: Companies
Limited by Guarantee.
Company Limited by Shares - A company which has a stated capital
divided into shares. An interest in the company is then acquired by
subscribing to or purchasing a share or shares in company and
becoming a member. A member who then has no further liability for
the debts of the company. Where shares are only partly paid, however,
members may then be required to pay the balance if called upon to do
so by the liquidator.
Private Limited Company (ltd) A private company must have limited or
ltd after its name to give a visible sign it is a limited company. Private
companies do not offer their shares to the public.
The benefits of a private limited company are the company is a legal
entity in its own right and as a result the shareholders are not
personally liable for the debts of the company once all the companys
funds have been exhausted.
Public Limited Company (plc) Companies limited by shares and must
have been registered (or re-registered) on or after 22 December 1980.
The Memorandum must state that the company is a public company.
Just because a company has been registered as a public limited
company (plc), this does not mean that it becomes listed on the stock
exchange or the Alternative Investment Market (AIM). There is a
separate process for public companies to be admitted to public stock
markets, and companies must meet additional criteria before admission
Company Limited by
Guarantee (CLG)
Company Limited by
Shares (CLS)
Company Secretary
Compliance
Constitution
Contingency Plan
Copyright
Corporate governance
Corporate Social
Responsibility (CSR)
A public limited company also has the benefit of being a separate legal
entity so shareholders are not personally liable.
See Company.
See Company.
See Secretary.
The action of meeting those requirements organisations are obliged to
meet as set down in legal and regulatory frameworks.
See Governing Document.
A plan of action made to be implemented when an unexpected
situations arise that cause project plans or overall plans to fall behind
target, when this happens the contingency plan is followed.
See Intellectual Property Rights.
See Governance.
How an organisation takes account of its economic, social and
environmental impacts in the way it carries out its activities.
Ethics Standards of morality and conduct of either an individual or
organisation.
Business Ethics Moral principles concerning acceptable and
unacceptable behaviour by business people. Executives should
maintain a high sense of values and conduct honest and fair practices
with the public.
Probity The quality of having strong moral principles; honesty and
decency.
Socially Responsible Investment - This combines investors' financial
oligations with their commitment to social concerns such as education,
social justice, economic development, peace or a healthy environment.
The Seven Principles of Public Life as defined by the committee on public
life chaired by Lord Nolan
www.public-standards.org.uk/
Director
11
12
Dividends
Division
For more information see ICSA Guidance Note: Roles of the Chairman,
Chief Executive and Senior Independent Director under the Combined Code
See Liability
Sometimes referred to a Business Continuity Plan or Disaster Recovery
Plan. The aim of the plan is to ensure that an organisation is fully
prepared to recover effectively from any major interruption with
minimal loss of business, market share (if relevant), customers and
customer confidence, whilst maintaining its statutory obligations
(including health and safety obligations).
A payment made to members out of a companys distributable profits,
in proportion to their shareholding.
For further information see ICSA Corporate Secretaryship 5th edition.
1. A company can have divisions which together constitutes a whole
such as the finance section of the company or the BBCs
engineering division.
2. Method of voting usually related to Parliament whereby voters (MPs
or members of the House of Lords, respectively) divide into separate
groups when they vote.
Due diligence
Duty
13
individual.
Ethics
Executive Committee
Executive Director
Extraordinary General
Meeting (EGM)
Fiduciary
Fiduciary Duty
Financial Accounts
Financial Planning
Financial Risk
Fundamental Risk
Governance
Governing Document
14
Governors
Greenbury Report
For more information regarding the governing documents in the notfor-profit sector please see ICSA Guidance Note: Governing Documents for
Charities.
NHS Foundation Trust Governor They attend meetings of the Council
of Governors, representing their local communities, and working
together to advise and influence its development as an NHS
Foundation Trust to meet the needs of local people in the future.
Governors also meet with people in their local community or staff
group, to help report back on what happens at Council of Governor
meetings, and to listen to ideas and opinions from members of the
public and staff. Legal duties of governors for a NHS FT consist of
obligations to:
appoint and remove the chairmans and non-executive
directors,
to approve the appointment of the chief executive
to appoint and remove the foundation trusts auditor
to receive the annual report and accounts, and the auditors
report at a general meeting; and
to be consulted on, consider and express a view on forward
planning by the board of directors.
For more information see the ICSA Best Practice Guide on NHS
Foundation Trusts.
School Governor Schools are run by a governing body working with the
headteacher and senior management team to ensure pupils get a good
education. The governing body of a school is responsible for ensuring
that it is run to promote pupil achievement. Its duties include: setting
strategic direction, policies and objectives, approving the school
budget, reviewing progress against the schools budget and objectives,
appointing, challenging and supporting the headteacher.
For more information see www.direct.gov.uk
The Report of a study group under the chairmanship of Sir Richard
15
Hampel Report
Healthcare Governance
Higgs Report
Honorary Officers
Indemnity Insurance
Independent Directors
Induction
Integrated Governance
Intellectual Property
Rights
16
Internal Audit
Investors
Joint committee
Key Performance
Indicators (KPIs)
Legislation
Liability
Meeting
18
Member
For more information see the ICSA Meetings and Minutes Handbook. Also
ICSA/Charity Commission Best Practice Guide to charity meetings
The definition of a member has some complications. Within a normal
company a member is essentially a shareholder in a company limited by
shares or a guarantor in a company limited by guarantee (CLG).
Members of unincorporated associations usually become so by
agreeing to abide by the bye-laws. In general, people usually become
members when their name is entered in the register of members which
is a formal document required of companies and CIOs as set out in the
Companies Act 2006.
For CLG membership is limited to the subscribers to the
Memorandum and to those who are admitted to membership under
the rules set out in the Articles.
Members under the charity definition can be the same as that for
charitable companies, but they may also operate a membership or
supporters scheme which provides certain benefits. Memebers of a
charity have the right to vote and to receive information on the
running of the charity.
Corporate members Include companies, local authorities and other
public bodies or organisations for which a nominated representative
holds a right to vote at the general meeting on behalf of the
organisation that they represent. This category would also include any
unincorporated charities and other not-for-profit organisations for
whom a representative is a voting member of another charity.
Individual Member An individual with the ability to affect the
governance of a charity by voting at the charitys annual general
meeting and who meets all other criteria for a member as set out in the
charitys governing document. Trustees, directors and any other person
who is on the governing body are excluded from this definition of a
19
member.
For more information see www.charity-comission.gov.uk
NHS foundation trust members Specific information on membership
will be outlined in an organisations constitution and membership
development strategy which is available from the NHS foundation
trust. There is no limit to the number of members that an individual
NHS foundation trust may have, nor any restriction on an individual
becoming a member of several NHS foundation trusts, as long as the
eligibility criteria is met.
Memorandum of
Association
Mergers
Minutes
For more information please see ICSA Best practice Guide: NHS
Foundation Trusts.
See Governing Document.
See Acquisition.
The clear recording and promulgation of decisions made both by the
members of the company and the board are essential for the good
administration of the organisation. The keeping of minutes is also a
legal requirement under the Companies Act 2006 S. 248.
Minutes can best be described as a record of proceedings in a meeting
which compiles the decisions being taken. In addition to providing a
record of decisions made by the board, minutes can also provide
contemporaneous and written evidence that the directors were
conscious of and complying with their duty of care.
Monitor
Monitoring
Motion
NHS Trust
For more information see ICSA One stop Company Secretary Fifth Edition.
The independent regulator of NHS Foundation Trusts.
Monitoring involves organisations setting up overview and scrutiny
committees. Their purpose is to hold the executive to account and also
to support the organisation in terms of policy development and
contribute to the organisations leadership role through scrutiny of the
organisations services and actions.
See Proposals.
Individual Trusts provide many services on behalf of the National
Health Service in England and Wales. They are not trusts in the legal
sense but are in effect public sector corporations. Each trust is headed
by a board consisting of executive and non-executive directors, and is
chaired by a non-executive director. Non-executive directors are
recruited by open advertisement.
NHS primary care trust (PCT) Can provide or commission both
primary and secondary care services
NHS Foundation Trusts Created as new legal entities in the form of
20
Proxy
Public liability
Public meeting
Pure Risk
Quorum
Remuneration
Committee
Resolution
See Risk.
Minimum number of persons who must be present at a meeting for
that meeting to be constitutionally valid, often defined in the governing
document, bye-laws, standing orders or terms of reference.
See Committee.
A proposal or motion put to a meeting and passed. (See Motion)
Ordinary Resolution The normal method of securing the members
approval for routine business transacted at a general meeting, such as
the election or re-election of directors. Ordinary resolutions will
require a majority of more than 50% votes cast to be in favour. They
are defined in the Companies Act 2006 s. 282.
Special Resolution A resolution that must be described as a special
resolution in the notice of a general meeting and must be passed by a
majority of 75% of the votes cast. The notice should set out the exact
text of the resolution and it may not be amended except to correct
minor clerical errors that do not affect the substance of the resolution.
A special resolution would be required, for example to alter the
Articles. A signed copy of the resolution must be delivered to the
Registrar of Companies within 15 days of it being passed. Special
resolutions are defined in the Companies Act s. 283
Extraordinary Resolution A resolution that must be described as an
extraordinary resolution in the notice of a general meeting and must be
passed by a majority of 75% of the votes cast. The notice should set
out the exact text of the resolution and it may not be amended except
to correct minor clerical errors that do not affect the substance of the
resolution. A signed copy of the resolution must be delivered to the
Registrar of Companies within 15 days of it being passed. The
Companies Act 1985 s.378 (1) defines extraordinary resolutions but the
Companies Act 2006 does not refer to them. They will however
continue to exist if the Memorandum or Articles of Association refer
to them as the Companies Act 1985 s.378 (1) has not been repealed.
Written Resolution - The Companies Act 2006 s. 288 sets out the
procedure for written resolutions of private companies (but not public
companies), as an alternative to holding a shareholder meeting.
A written resolution can be passed if it is agreed to by 50% of the
members for an ordinary resolution or if it is a special resolution then
75% is needed. A written resolution has the same effect of a resolution
that has been passed at a general meeting (s. 288 (5)).
Risk
22
Scrutiny
Secretary
23
See Director.
See CSR.
See Director.
The companys ownership, which has been divided into shares and can
24
Show of hands
Smith Report
25
Socially Responsible
Investment
SORP
Special committee
Special resolution
Stakeholders
Standing Committee
Standing Orders
Statutory
Sub-committee
Takeover
Terms of Reference
Trademark
Trust
Trust Secretary
Trustee
Turnbull Report
Vicarious liability
Vote
Voting
27
Whistleblowing
28