Pretty much all siding materials need to have a couple of inches gap between a horizontal surface the the siding. Even Hardie requires a 2 inch gap in its warranty coverage. The reason is that if the gap is too small, water can be sucked into it due to capillary action. Once in the gap, it can be absorbed into the material and cause rot or degradation several inches above the lower edge of the panel. Additionally, if you have problems with water overflowing gutters, water can splash onto the materials and possibly cause degradation.
This wall should have been constructed with a weather barrier (such as Tyvek) behind it. An even better construction would be one with a drainage plane between the exterior sheathing and the weather barrier. I am not sure about whether a flashing is needed without knowing more about the wall construction. Flashing is usually needed to direct water out of the wall assembly to the exterior. If the water cannot enter into the wall assembly, a flashing may not be needed.
That being said, I could not help but notice that a flashing was not installed between the exterior sheathing and the brick coping. Since one was not installed, you really need to make sure that the caulk between the brick and exterior sheathing is maintained.