FOURSTRUCTURAL CORPORATE GOVERNANCE ISSUES
INDEPENDENCE OF INTERNAL AUDITORS
Internal Auditors independence appeared to be impaired as they were reporting on a day to day basis (administratively) to CFO (as mentioned in the company’s financial statements). However, as per the guidelines of the Institute of Internal Auditors, the US, Internal Auditors are supposed to report to the CEO.
Functionally the IA’s were reporting to the Board.
SIGNIFICANT NON-AUDIT FEE
Almost 50% of external auditors’ remuneration was comprised of Non-Audit Fee during the last 3 years yet they were reelected in June 2019.
NOMINATION COMMITTEE WAS NOT PROACTIVE
Nomination Committee of the Board did not formally meet even once during 2016 & 2018. They had one meeting during 2017. The Chartered Governance Institute, UK recommends that Nomination Committee shall meet at least twice every year
MEMBERS OF BOARD WERE NOT APPROPRIATE FOR JOB
Members of the Board were not appropriate for the job. Mark Tompkins who’s been serving on the NMCs board for eight years served as a Chairman of Healthcare Enterprises, which collapsed in 2011. Lord Clan William, who’s been serving on the NMCs board since 2012 and is also the current Chairman of the NMCs Audit Committee does not have any financial expertise in matters related to accounting or auditing.