Board failures in the financial crisis: tinkering with codes and the case for wider corporate reform in the UK (Part 1)
The financial crisis has exposed egregious failures of corporate governance with bank boards unaware of the extent of the risks facing their businesses and non executive directors incapable of challenging dominant executives. This article considers the value of the Walker and Financial Reporting Cou...
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| Format: | Article |
| Language: | English |
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2011-12.
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| Online Access: | Get fulltext |
| Summary: | The financial crisis has exposed egregious failures of corporate governance with bank boards unaware of the extent of the risks facing their businesses and non executive directors incapable of challenging dominant executives. This article considers the value of the Walker and Financial Reporting Council's reviews and reform of the UK Corporate Governance Code in the light of these failures, focusing on the role of the non-executive directors. The article considers that a 'business as usual' type of response is insufficient in these circumstances and more radical corporate governance reforms should be considered. Two issues deserve particular attention. First, board composition and competence must be addressed and the value of shareholder engagement on this issue is considered. Secondly, and more radically, the case is made for setting up a public interest oversight body under the umbrella of the FRC to have oversight of corporate governance issues in publicly traded companies. |
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