ACCA Applied Knowledge · Business and Technology · Governance in business organisations
Which board committee is normally responsible for recommending the pay and incentive packages of executive directors, and is best composed of independent non-executive directors?
The remuneration committee recommends executive directors' pay and incentives. It should consist of independent non-executive directors so that executives do not set their own rewards, which would create a conflict of interest.
- AAudit committee
- BNomination committee
- CRemuneration committeeCorrect
- DRisk committee
Explanation
The remuneration committee sets or recommends executive pay to avoid directors deciding their own rewards. The nomination committee handles board appointments, while the audit committee oversees reporting, internal control and the audit.
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