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The Combined Code on Corporate Governance
Cover 3.qxd 13/10/2005 13:49 Page 1 THE COMBINED CODE ON CORPORATE GOVERNANCE FINANCIAL REPORTING COUNCIL HOLBORN HALL 100 GRAY’S INN ROAD LONDON WC1X 8AL TELEPHONE 020 7611 9700 WEBSITES http://www.frc.org.uk http://www.asb.org.uk http://www.frrp.org.uk Cover 3.qxd 13/10/2005 13:49 Page 2 © Financial Reporting Council 2003 ISBN1 84140 406 3 Electronic copies of this volume and related material are available on the FRC website:http://www.frc.org.uk/combined.cfm. Printed copies may be ordered from CCH Information, tel 0870 777 2906 or ordered online at: www.asbpublications.com 2005.qxp 13/10/05 1:44 pm Page 1 THE COMBINED CODE ON CORPORATE GOVERNANCE July 2003 2005.qxp 13/10/05 1:44 pm Page 2 2005.qxp 13/10/05 1:44 pm Page 3 CONTENTS Pages The Combined Code on Corporate Governance Preamble 1-3 Section 1 COMPANIES 4-19 A Directors 4-11 B Remuneration 12-14 C Accountability and Audit 15-17 D Relations with Shareholders 18-19 Section 2 INSTITUTIONAL SHAREHOLDERS 19-20 E Institutional Shareholders 19-20 Schedule A Provisions on the design of performance related remuneration 21 Schedule B Guidance on liability of non-executive directors: care, skill and diligence 22 Schedule C Disclosure of corporate governance arrangements 23-24 Related Guidance and Good Practice Suggestions Guidance on internal control (The Turnbull Guidance) 27-42 Guidance on audit committees (The Smith Guidance) 43-59 Suggestions for good practice from the Higgs report 61-81 Guidance on the role of the chairman 63-64 Guidance on the role of non-executive director 65-66 Summary of the principal duties of the remuneration committee 67-68 Summary of the principal duties of the nomination committee 69-70 Pre-appointment due diligence checklist for new board members 71-72 Sample letter of non-executive director appointment 73-76 Induction checklist 77-78 Performance evaluation checklist 79-81 Useful Web Links 83-84 2005.qxp 13/10/05 1:44 pm Page 4 2005.qxp 13/10/05 1:44 pm Page 1 CODE ON CORPORATE GOVERNANCE PREAMBLE 1. -
Corporate Governance in the Alternative Investment Market of the London Stock Exchange Neeta Shirish Shah
Corporate Governance in the Alternative Investment Market of the London Stock Exchange Neeta Shirish Shah Thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Management at Royal Holloway, University of London October 2014 1 DECLARATION OF AUTHORSHIP I, Neeta Shirish Shah, hereby declare that this thesis and the work presented in it is entirely my own. Where I have consulted the work of others, this is always clearly stated. Signed: Neeta Shah Date: 14 October 2014 2 ACKNOWLEDGEMENTS This thesis is the result of my work at the School of Management, Royal Holloway, University of London. I acknowledge Westminster Business School for the financial support that I have received towards the funding of the PhD programme. My special thanks go to my supervisors Professor Christopher Napier, Dr Stavroula Iliopoulou and advisor Professor Jane Davison at the Royal Holloway, University of London. I am deeply honoured that Professor Napier has remained as my supervisor, since he has given me outstanding academic support, and has been a source of inspiration and encouragement. I am particularly indebted to him for helping me develop as an academic researcher and showing me support over the past years. I would like to thank Professor Orla Gough, Professor Ben Nowman and all the members of the University of Westminster Department of Accounting, Finance and Governance, since, without their support; the completion of this thesis would not have been possible. In addition, I would like to express my appreciation to Dr Stewart Brodie who helped in the final days of my thesis. -
The Cadbury Report 1992: Shared Vision and Beyond
The Cadbury Report 1992: Shared Vision and Beyond Neeta Shah University of Westminster, London, England, United Kingdom [email protected] Christopher J. Napier Royal Holloway University of London, England, United Kingdom [email protected] ABSTRACT This paper explores the shift from the Cadbury Report (1992) norms and rules to the current UK Corporate Governance Code (2014) focusing upon the reasoning, the influences and the implications thereof. The Cadbury Report (1992) has provided us with the legacy of definition of the corporate governance as the “system by which companies are directed and controlled”, voluntary adoption of the governance best practices and the “comply or explain” principle. The adoption of good governance practices is especially significant for the relationship between managers and shareholders in achieving high standards of corporate behaviour. Issues relating to managerial accountability, transparency, and regulation have been complex and still require further evaluation. The publication of the Cadbury Report (1992) has proven to be an influential in the development of a number of corporate governance codes worldwide. The greatest achievement of the Cadbury Report (1992) is the voluntary adoption of the corporate governance recommendations and use of the comply or explain principle. We believe that the flexibility provided by the adoption of the voluntary code of best practice is the strength of corporate governance in the UK, yet the constantly evolving UK corporate governance code may be an indication of a deeper problem. An important part of the corporate governance is the prioritisation of the shareholder value, and although this is still the case, the UK Corporate Governance Code 2014 has veered for behavioural change. -
Understanding How Issues in Corporate Governance Develop: Cadbury Report to Higgs Review
View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics UNDERSTANDING HOW ISSUES IN CORPORATE GOVERNANCE DEVELOP: CADBURY REPORT TO HIGGS REVIEW ESRC Centre for Business Research, University of Cambridge Working Paper No. 277 By Ian Jones Centre for Business Research University of Cambridge Judge Institute of Management Studies Building Trumpington Street Cambridge CB2 1AG Email: [email protected] Michael Pollitt Judge Institute of Management University of Cambridge Trumpington Street Cambridge CB2 1AG Email: [email protected] December 2003 This working paper forms part of CBR Research Programme 2 on Corporate Governance Abstract Issues in corporate governance develop according to an identifiable process. Using the influence model of Jones and Pollitt (2002) we compare the conduct of and influences on the investigations leading to the Higgs Review (2003) and the Cadbury Report (1992). We suggest that while there are similarities in the investigations there are important differences arising from the review process adopted, the role of the government, the background of the leaders of the investigations and the influence of academics. These differences have had important implications for the effectiveness of the implementation of the conclusions of the Higgs Review. JEL Codes: M14 Keywords: corporate governance, Cadbury Report, Higgs Review, business ethics, influences. Acknowledgements The authors acknowledge the support and encouragement of Christos Pitelis and helpful comments of two anonymous referees. All remaining errors are our own. This is a preprint of an Article accepted for publication in Corporate Governance: An International Review, April 2004 published by Blackwell Publishing. -
Devicelock for Compliance with the Combined Code on Corporate Governance (UK)
DeviceLock for Compliance with the Combined Code on Corporate Governance (UK) Contents • Introduction • Combined Code Requirements • How is the Combined Code Different from SOX? • The Key Components of the Combined Code • The Internal Control System under the Combined Code • DeviceLock from DeviceLock, Inc. • How DeviceLock Can Help Create an Internal Control System • About DeviceLock, Inc. • Contact Information Introduction The corporate governance systems of public companies listed on the London Stock Exchange (LSE) are governed by the Combined Code on Corporate Governance. The principles, rules and requirements set out in the Combined Code are aimed at increasing the effectiveness of information disclosure, thus increasing the transparency of public companies. They are also meant to put into place the means for internal control over financial reports and corporate assets in order to protect shareholder interests. Unlike the United State's very strict Sarbanes-Oxley Act of 2002 (SOX), the Combined Code’s requirements are not mandatory. However, if the management of a public company refuses to implement the rules or principles of the Code, it must provide a clear argument to investors defending its position. More often than not, the easiest route for a company is to follow best practices as they are set out in the Code, rather than to ignore them. At the same time, the Combined Code does have quite a bit in common with SOX, in particular, SOX's well-known Clause 404. This clause requires that a company put an internal control system into place. Some guiding principles for this were set out in the Turnbull Report of 1999. -
Corporate-Governance.Pdf
1. INTRODUCTION .......................................................................................................... 1 2. CORPORATE GOVERNANCE DEFINED ................................................................... 1 3. EVOLUTION OF CORPORATE GOVERNANCE IN THE UK..................................... 2 4. THE COMBINED CODE .............................................................................................. 2 4.1 Section 1 Companies ....................................................................................... 3 4.1.1 Directors ............................................................................................... 3 4.1.2 Directors’ Remuneration....................................................................... 3 4.1.3 Relations with Shareholders................................................................. 4 4.1.4 Accountability and Audit ....................................................................... 4 4.2 Section 2 Institutional Shareholders................................................................. 5 4.2.1 Institutional Investors............................................................................ 5 5. THE POWER OF COMPLY-OR-EXPLAIN .................................................................. 5 6. PROPOSED UK REFORMS ........................................................................................ 6 6.1 Higgs Report ..................................................................................................... 6 6.2 Smith Report.................................................................................................... -
Corporate Governance 2
Corporate Governance (2) Constituted Committees for the Recommendation on Corporate Governance The Council for Fair Business Protection of consumer interest and their rights to Practices (1966) and Code for information, to choose and to be heard; Equitable Indian Business (by Great distribution at times of shortages; Best manufacturing Industrialist) practices and strive for zero defects in their products: Quality inspection and assurance of raw materials and packaging materials and finished products; Uniform price on identical quantities and fair returns to distributive trade; Proper information of products /services to the buyers; Honest advertising; Prompt after-sales service; Quality, fair price and value for money to consumers; Adequate steps against adulteration and short weights and measures; Supply of spares in time; Fair business practices and self- regulation in self-interest and in the interest of consumers; More and more manufacturers should voluntarily seek certification marks like “I.S.I.” and “Agmark” for their products. Sachar Committee (1978) The Committee inter alia, looked into the social (India) responsibilities of companies . Every company apart from being able to justify itself on the test of economic viability will have to pass the test of a socially responsible entity. Cadbury Report, United The objective of the Cadbury committee was to Kingdom 1992 (UK) investigate how large public companies should adopt corporate governance guidelines with a focus on the procedures of financial report production and the role of the accounting profession. Issues included the role of the board of directors, standards of financial reporting, accountability of the auditors and directors pay. Greenbury Report, United The report dealt with the remuneration of executives and Kingdom, 1995 (UK) non-executives board members and recommended the setting up of a remuneration committee in each public company to determine remuneration packages for the board members.