Corporate Governance
Reading
Books
Hannigan 105-152
Hicks & Goo 237 - 264
Kershaw D. Company Law in Context Oxford University Press, Oxford, 2009
Pages 163‐168 & 222‐287
Codes/Committee Reports
Committee on the Financial Aspects of Corporate Governance (Chair: Sir Adrian
Cadbury), Final Report together with Code of Best Practice (December 1992).
Higgs, D. “Review of the role and effectiveness of non-executive directors” (DTI,
January 2003).
The failure of the Royal Bank of Scotland - Financial Services Authority Board Report
((London: Financial Services Authority, 2011)
“The Run on the Rock.” House of Commons Treasury Committee Fifth Report of
Session 2007–08 Volume Ordered by The House of Commons to be printed 24
January 2008
The Financial Aspects of Corporate Governance; A review of corporate governance in
UK banks and other financial industry entities Final recommendations - 26 November
2009 (The Walker Report)
The Turner Review: A regulatory response to the global banking crisis March 2009
http://www.fsa.gov.uk/pages/library/corporate/turner/index.shtml
The failure of the Royal Bank of Scotland: Financial Services Authority Board Report.
December 2011http://www.fsa.gov.uk/library/other_publications/miscellaneous/
2011/rbs.shtml)
Law Commission report: Legislating the Criminal Code: Corruption, Report No.248
Law Commission Consultation – Reforming Bribery (Consultation Paper No.185) 2007
Law Commission Report – Reforming Bribery (Report No. 313) 2008
White Paper: Raising Standards and Upholding Integrity: the prevention of
corruption Cm 4759
Seminar Questions
1. “The recent banking crisis highlighted failures in many areas. The most
serious failings were those of corporate governance.”
Critically assess the effectiveness of corporate governance in the UK.
2. “The multitude of corporate failures since the Cadbury Report, together with
the continuing problem of excessive executive remuneration, demonstrates
that the codes of corporate governance have been an abject failure. Self-
regulation has not worked.”
Critically evaluate the above statement with particular reference to the
codes of corporate governance.
3. “The continuing escalation of executive remuneration, particularly in
underperforming financial firms, demonstrates that modern corporate
governance has completely failed to control the excesses of senior
management.”
Critically analyse the above statement.
4. Groucho & Windsor plc is an extremely well known supermarket chain, at the
very top end of the UK market. Over the past year G & W has been involved
in the following controversies.
A) In January 2019 various newspapers carried reports that Fred Badloss,
the former Managing Director of G&W, had been given a £500,000
pay-off when he was removed from the board in December 2018.
This was in addition to his £1,000,000 a year pension. According to
the newspaper reports, shareholders in G&W are furious about this
because G&W posted a big loss in its recently published accounts.
B) In March 2019 a national television station broadcast a documentary
about corporate governance in large UK companies. In particular it
looked at the employment of non-executive directors within the G&W
board. The documentary found that that the non-executive directors
all lacked retail business experience. More worryingly, the non-
executive directors were all being paid large sums for other services
to the company, outside their roles as non-executive directors.
C) In April 2020, G&W announced that Sir Stuart Carnation, the current
Chairman would be also taking over the role of Managing Director.
Lawful & Generic, a large insurance firm that owns 20% of the shares
in G&W, issue a statement saying that they are unhappy with this
appointment.
Advise Groucho & Windsor plc on any corporate governance implications
from the above. Your answer must refer to academic opinion and to the
Combined Code.
5. The Bribery Act 2010 has attracted significant controversy. Although
rationalising the antiquated laws of bribery within one statute is
sensible and overdue; the extension of the law by the creation of an
offence covering commercial organisations is ill-conceived and may
threaten the future prosperity of UK business.
Critically analyse the above statement.
6. Why was the legislative process of the Bribery Act 2010 so long?
7. With reference to the published Ministry of Justice guidance, design
a template for a anti-bribery policy suitable for a UK university.
8. S.7 Bribery Act 2010 is merely another form of corporate governance
mechanism; the only meaningful difference between this provision
and the innumerable codes of corporate governance is that it is
supported by swinging criminal sanctions.
Critically evaluate the above statement.
Learning outcomes
Understand the reasons behind the various
theories of corporate governance;
Understand the reasons behind the development of the combined code;
Understand the different roles played by participants such as institutional in
vestors, non‐executive directors, audit committees, nomination committees
and remuneration committees.
Understand the different nature of the study of corporate governance comp
ared to law.
Understand the reasons behind the reforms in Bribery law.
Apply knowledge gained to essay and problem question scenarios
Develop skills of critical analysis and evaluation by an in depth examination
of the academic literature relating to the corporate governance.
Develop skills of application and critical analysis by answering problem and
essay questions involving corporate governance.
