You are an audit manager of PY and have been assigned to the audit of TT Co (TT), a company which is planning to list on a stock exchange within six months. The listing rules of the stock exchange require compliance with corporate governance principles, and the directors are unsure whether they are following best practices in relation to this. They have asked the audit engagement partner for their view on this matter.

TTs board is comprised of six executive directors, a non-executive chairman and three other non-executive directors (NEDs). The chairman and one of the NEDs are former executive directors of TT and on reaching retirement age were asked to take on non-executive roles. The company has established an audit committee, and all NEDs are members including the chairman who chairs the committee. All four members of the audit committee were previously involved in sales or production related roles.

All of the directors have been members of the board for at least four years. As the chairman does not have an executive role, he has sole responsibility for liaising with the shareholders and answering any of their questions. The company has not established an internal audit function to monitor internal controls.

Q:

Describe FIVE corporate governance weaknesses faced by TT Co and provide a recommendation to address each weakness to ensure compliance with corporate governance principles.