Essays on Development of the UK Corporate Governance Code Assignment

Download full paperFile format: .doc, available for editing

The paper "Development of the UK Corporate Governance Code" is an outstanding example of a finance and accounting assignment. The UK has a highly liquid listed company sector with dispersed ownership and a system of corporate governance that has developed significantly over the last two decades. Prior to 1992, the corporate governance of UK companies was regulated by customs and practice. According to Mullerat and Brennan (2010, p. 51), company law together with some stock requirements laid down only basic rules concerning boards of directors, financial reporting and audit.

The Cadbury review was established in 1991 in response to a series of financial scandals. The Cadbury Report which was released in 1992 began the process of greater codification of corporate governance norms and as Mallin (2007, p. 22) points out, the report was the first to set out recommendations regarding the structure of boards of directors and companies’ accounting systems in the UK. Following on from the Cadbury Report, there have been a number of subsequent reviews to the corporate code made by committees led by Sir Richard Greenbury (1995), Sir Ronnie Hampel (1998), Nigel Turnbull (1999), Sir Derek Higgs and Sir Robert Smith (2003), and Sir David Walker (2009) (Bain & Barker, 2010, p.

267; Blowfield & Murray, 2008, p. 216; Brown & Snyder, 2012, p. 299). The reviews covered various aspects of corporate governance including executive remuneration, internal control, non-executive directors (NEDs) and audit committees. The recommendations made in all these reviews are incorporated in the UK Corporate Governance Code 2010. The standards laid out in this code are not legally enforceable and thus, it is a voluntary code for the directors of UK companies.

However, companies with a premium listing on the London Stock Exchange (LSE) are required to apply the code on a ‘ comply and explain’ basis. According to Mallin (2007, p. 22), the code has relevance to most companies and organisations irrespective of their size and whether they are quoted or not and in many instances, the code has been a source of deterrence to financial irregularities. This report reviews the development of the UK corporate development code from 1992, explaining its effectiveness as a source of deterrence to financial irregularities.

REFERENCES

Associated British Foods Plc 2011, ‘Compliance with the UK Corporate Governance Code,’ accessed 5th March 2012 from, http://www.abf.co.uk/statement-of-compliance.aspx

Bain, N & Barker, R 2010, The Effective Board: Building Individual and Board Success, Kogan Page Publishers, London.

Barclays 2011, ‘Risk and Governance’ accessed 5th March 2012 from, http://www.barclaysannualreport.com/ar2010/index.asp?pageid=49

Blowfield, M & Murray, A 2008, Corporate Responsibility: A Critical Introduction, Oxford University Press, New York.

Brennan, N M & Solomon, J 2008, ‘Corporate governance, accountability and mechanisms of accountability: An overview’ Accounting, Auditing & Accountability Journal, Vol. 21, No. 7, pp. 885-906.

Brown, K B & Snyder, D V 2012, General Reports of the XVIIIth Congress of the International Academy of Comparative Law, Springer, Massachusetts.

Brown, R 2009, ‘Revisiting the expectations gaps after 15 years’, Journal of Applied Accounting Research, Vol. 10, Issue: 2, pp. 92 – 95.

Chapman, R J 2012, Simple Tools and Techniques for Enterprise Risk Management, John Wiley and Sons, London.

Davidson, A 2010, How the City Really Works: The Definitive Guide to Money and Investing in London's Square Mile, Kogan Page Publishers, London.

Davies, H 2002, ‘Corporate governance and the development of global capital markets’, Balance Sheet, Vol. 10, Issue: 3, pp. 14 – 18.

FRC 2003, ‘Guidance on Audit Committees (The Smith Guidance),’ accessed 5th March 2012 from http://www.frc.org.uk/documents/pagemanager/frc/Smith%20Report%202005.pdf

FRC 2006, ‘The Combined Code on Corporate Governance,’ accessed 5th March 2012 from http://www.frc.org.uk/documents/pagemanager/frc/Combined%20Code%20June%202006.pdf

FRC 2008, ‘The Combined Code on Corporate Governance,’ accessed 5th March 2012 from http://www.frc.org.uk/documents/pagemanager/frc/Combined_Code_June_2008/Combined%20Code%20Web%20Optimized%20June%202008%282%29.pdf

FRC 2010, ‘The UK Corporate Governance Code,’ accessed 5th March 2012 from http://www.frc.org.uk/documents/pagemanager/corporate_governance/uk%20corp%20gov%20code%20june%202010.pdf

FRC 2012, ‘Promoting high quality corporate governance and reporting to foster investment,’ accessed 5th March 2012 from http://www.frc.org.uk/index.cfm

Frederikslust, R A I V & Ang, J S 2008, Corporate Governance and Corporate Finance: A European Perspective, Taylor & Francis, London.

Great Britain: H.M. Treasury 2010, Budget 2010: Securing the Recovery, Economic and Fiscal Strategy Report and Financial Statement and Budget Report, The Stationery Office, London.

Hand, L Isaaks, C & Sanderson, P 2004, Introduction to Accounting for Non-specialists, Cengage Learning EMEA, California.

Handley-Schachler, M., Juleff, L. & Paton, C., (2007) ‘Corporate governance in the financial services sector’, Corporate Governance, Vol. 7 Issue: 5, pp. 623 – 634.

Harper, J 2007, Chairing the Board: A Practical Guide to Activities and Responsibilities, 2nd edn, Kogan Page Publishers, London.

Institute of Directors Staff 2010, The Director's Handbook: Your Duties, Responsibilities and Liabilities, Kogan Page Publishers, London.

Mallin, C A 2007, Corporate Governance, Oxford University Press.

Mullerat, R & Brennan, D 2010, Corporate Social Responsibility: The Corporate Governance of the 21st century, Kluwer Law International, New York.

Ogilvie, J 2007, CIMA Official Learning System Management Accounting Financial Strategy, 4th edn, Butterworth-Heinemann, London.

Organisation for Economic Co-operation and Development (OECD) 2011, Corporate Governance Board Practices: Incentives and Governing Risks, OECD Publishing, Paris.

Oxelheim, L & Wihlborg, C 2008, Markets and Compensation for Executives in Europe, Emerald Group Publishing, Bingley.

Pass, C 2006 "The revised Combined Code and corporate governance: An empirical survey of 50 large UK companies", Managerial Law, Vol. 48 Issue: 5, pp. 467 – 478.

Pass, C 2008, ‘Non-executive directors and the UK's new combined code on corporate governance", Business Strategy Series, Vol. 9, Issue: 6, pp. 291 – 296.

Ross, A & Crossan, K 2012, ‘A review of the influence of corporate governance on the banking crises in the United Kingdom and Germany’, Corporate Governance, Vol. 12 Issue: 2, pp. 112-128.

Short, H 1999, ‘Corporate governance: Cadbury, Greenbury and Hampel — A review’, Journal of Financial Regulation and Compliance, Vol. 7, Issue: 1, pp. 57 – 67.

Sikka, P 2008 ‘Corporate governance: What about the workers?’ Accounting, Auditing & Accountability Journal, Vol. 21 Issue: 7, pp. 955 – 977.

Smiith, H 2010, ‘Corporate Governance: Status Report,’ accessed 5th March 2012 from, http://www.herbertsmith.com/NR/rdonlyres/4070E00E-CB33-436D-9934-C0D02470EF7A/0/8734StatusReport_d3.pdf

Solomon, J 2007, Corporate Governance and Accountability, 2nd edn, John Wiley and Sons, New York.

Solomon, J 2007, Corporate Governance and Accountability, John Wiley and Sons, London.

Spedding, L S 2008, The Due Diligence Handbook: Corporate Governance, Risk Management and Business Planning, Butterworth-Heinemann, London.

Spira, L F 2001, ‘Enterprise and accountability: Striking a balance’, Management Decision, Vol. 39, Issue: 9, pp. 739 – 748.

The Stationery Office 2011, Auditors: Market Concentration and Their Role Volume II: Evidence, The Stationery Office, London.

Tomasic, R 2011, ‘The financial crisis and the haphazard pursuit of financial crime’, Journal of Financial Crime, Vol. 18, Issue: 1, pp. 7 – 31.

Vinten, G 2001, "Corporate Governance and the Sons of Cadbury", Corporate Governance, Vol. 1, Issue: 4, pp. 4 – 8.

Walker Review 2009, ‘The Review of Corporate governance in UK banks and other financial industry entities,’ accessed 5th March 2012 from, http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/walker_review_261109.pdf

Zaman, M 2001, ‘Turnbull – generating undue expectations of the corporate governance role of audit committees’, Managerial Auditing Journal, Vol. 16 Issue: 1, pp. 5 – 9.

Download full paperFile format: .doc, available for editing
Contact Us