Spot the Red Flag

Read the scenario. Identify the compliance red flags. How sharp are your instincts?

Day 172 ESG Medium

Share this page:

Educational Tool Only. This tool is provided for educational and informational purposes and does not constitute legal, regulatory, or professional advice. Results should not be used as the sole basis for any compliance or business decision.

No Guarantee of Accuracy. While this tool is based on recognised regulatory frameworks, LexFlag does not guarantee the accuracy, completeness, or currency of the results. Regulations change frequently and may vary by jurisdiction.

Independent Verification Required. You should consult qualified professionals and independently verify any results before making any decisions. LexFlag and its affiliates accept no liability for any loss or damage arising from the use of this tool.

The Scenario

Your fund manager is evaluating Titan Manufacturing PLC, a FTSE 250 company, for its governance practices. The board of directors has 9 members, 7 of whom have served for over 15 years. The CEO also serves as Chairman, and his compensation package of £8.2 million was approved despite the company's share price declining 35% over three years. The audit committee includes two members who have consulting contracts with the company. An anonymous whistleblower hotline exists but is managed by the CEO's office. Only 12% of shareholder resolutions passed at the last AGM.

Which of these are red flags?

Select all that you think are compliance red flags, then submit.

Only 12% of shareholder resolutions passed at the AGM

Low pass rates for shareholder resolutions reflect management resistance to shareholder input, but are an outcome of poor governance, not a red flag to identify.

CEO also serves as Chairman of the Board

Combining the CEO and Chairman roles concentrates power and undermines the board's ability to independently oversee management.

7 of 9 board members serving 15+ years

Long board tenure reduces independence and fresh perspectives. Governance codes typically recommend term limits to prevent entrenchment.

Audit committee members have consulting contracts with the company

Audit committee members with financial ties to the company cannot be considered independent, compromising audit integrity.

Whistleblower hotline managed by the CEO's office

A whistleblower channel managed by the person most likely to be reported on effectively renders it useless and may deter reporting.

£8.2M CEO pay despite 35% share price decline

Executive compensation disconnected from performance is a governance failure indicating weak board oversight and misaligned incentives.

The company is listed on the FTSE 250

Being a FTSE 250 company is a factual characteristic, not a governance risk indicator.

Share your result to unlock a bonus challenge

Want unlimited challenges? Sign up for free.

Create Free Account

Try also — Compliance Stack

All games

Want the real tools?

Screen real entities against global watchlists, risk databases, and compliance sources.

Start Free Trial