Corporate Governance regime in the UK
As a result of the banking crisis, a review of the corporate governance regime in the UK was carried out by the Financial Reporting Council (FRC). The review resulted in two principal changes to the regime. Following a review of the Combined Code on Corporate Governance, the FRC issued a new edition of the Code- the “UK Corporate Governance Code”. The UK Corporate Governance Code applies for accounting periods beginning on or after 29 June 2010 and is the key source of corporate governance recommendations for companies with a premium listing of equity shares in UK (regardless of the country of their incorporation) and is kept under review by the FRC. Certain parts of the UK Corporate Governance Code apply only to FTSE 350 companies. The Combined Code on Corporate Governance continues to apply to quoted companies for accounting periods prior to 29 June 2010. In addition, the Companies Act 2006 sets out certain principles of corporate governance, and is supplemented by the Listing Rules, Prospectus Rules and the Disclosure and Transparency Rules. The Listing Rules require that companies to whom these codes apply must either comply with the relevant code or explain the reasons for non-compliance in their annual reports. The UK Corporate Governance Code encourages chairmen of the board to report personally in their annual statements on compliance with certain aspects of the Code. The second change is the introduction of the UK Stewardship Code. The UK Stewardship Code is borne out of the Walker review and aims to enhance the quality of engagement between institutional investors and investee companies by setting out good practice on engagement of institutional shareholders with investee companies. Like companies, under the UK Stewardship Code, institutional shareholders are being asked to adopt a ‘comply or explain’ approach, by publishing details of their compliance with the code on their websites. Bribery and anti-corruption is...
Please join StudyMode to read the full document