UK Corporate Governance Code英国公司治理准则

UK Corporate Governance Code

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The

UK Corporate Governance Code 2010

(from here on referred to as

Code

corporate governance

aimed at

companies listed on the

London Stock Exchange

. It is overseen by the

Financial

Reporting

Council

and

its

importance

derives

from

the

Financial

Services Authority

's

Listing Rules

. The Listing Rules themselves are

given statutory authority under the

Financial Services and Markets Act

[1]

2000

and require that public listed companies disclose how they have

complied

with

the

code,

and

explain

where they

have

not

applied

the

code

[2]

-

in

what

the

code

refers

to

as

'comply

or

explain'.

Private

companies

are also encouraged to conform; however there is no requirement for

disclosure of compliance in private company accounts. The Code adopts a

principles-based approach in the sense that it provides general

guidelines

of

best

practice.

This

contrasts

with

a

rules- based

approach

which rigidly defines exact provisions that must be adhered to.

Contents

[

hide

]

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?

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?

?

1 Origins

2 Contents

o

2.1 Schedules

3 Code compliance?

4 See also

5 Notes

6 References

7 External links

[

edit

] Origins

The Code is essentially a consolidation and refinement of a number of

different reports and codes concerning opinions on good corporate

governance. The first step on the road to the initial iteration of the

code was the publication of the

Cadbury Report

in 1992. Produced by a

committee

chaired

by

Sir

Adrian

Cadbury

,

the

Report

was

a

response

to

major

corporate scandals associated with governance failures in the UK. The

committee was formed in 1991 after

Polly Peck

, a major UK company, went

insolvent

after

years

of

falsifying

financial

reports.

Initially

limited

to

preventing

financial

fraud,

when

BCCI

and

Robert

Maxwell

scandals

took

place, Cadbury's remit was expanded to corporate governance generally.

Hence the final report covered financial, auditing and corporate

governance

matters,

and

made

the

following

three

basic

recommendations:

the CEO and Chairman of companies should be separated

?

boards

should

have

at

least

three

non- executive

directors,

two

of

whom should have no financial or personal ties to executives

?

each

board

should

have

an

audit

committee

composed

of

non-executive

directors

?

These

recommendations

were

initially

highly

controversial,

although

they

did

no

more

than

reflect

the

contemporary

practice

and

urged

that

these practices be spread across listed companies. At the same time it

was

emphasised

by

Cadbury

that

there

was

no

such

thing

as

size

fits

all

[3]

In

1994,

the

principles

were

appended

to

the

Listing

Rules

of

the

London Stock Exchange

, and it was stipulated that companies need not

comply with the principles, but had to explain to the stock market why

not if they did not.

Before long, a further committee chaired by chairman of

Marks & Spencer

Sir Richard Greenbury

was set up as a 'study group' on

executive

compensation

.

It

responded

to

public

anger,

and

some

vague

statements

by

the Prime Minister

John Major

that regulation might be necessary, over

spiralling

executive

pay

,

particularly

in

public

utilities

that

had

been

privatised

.

In

1996

the

Greenbury

Report

was

published.

This

recommended

some further changes to the existing principles in the Cadbury Code:

each board should have a remuneration committee composed without

executive directors, but possibly the chairman

?

directors should have long term performance related pay, which

should

be

disclosed

in

the

company

accounts

and

contracts

renewable

each year

?

Greenbury

recommended

that

progress

be

reviewed

every

three

years

and

so

in

1998

Sir

Ronald

Hampel

,

who

was

chairman

and

managing

director

of

ICI

plc

,

chaired

a

third

committee.

The

ensuing

Hampel

Report

suggested

that

all

the

Cadbury

and

Greenbury

principles

be

consolidated

into

a

Code

the Chairman of the board should be seen as the

non- executive directors

?

institutional

investors

should

consider

voting

the

shares

they

held

at meetings, though rejected compulsory voting

?

all

kinds

of

remuneration

including

pensions

should

be

disclosed.

?

It rejected the idea that had been touted that the UK should follow the

German two-tier board structure, or reforms in the EU Draft Fifth

Directive on Company Law.

[4]

A further mini- report was produced the

following

year

by

the

Turnbull

Committee

which

recommended

directors

be

responsible for internal financial and auditing controls. A number of

other

reports

were

issued

through

the

next

decade,

particularly

including

the

Higgs review

, from

Derek Higgs

focusing on what non-executive

directors should do, and responding to the problems thrown up by the

collapse

of

Enron

in

the

US.

Paul

Myners

also

completed

two

major

reviews

of

the

role

of

institutional

investors

for

the

Treasury,

whose

principles

were also found in the Combined Code. Shortly following the collapse of

Northern Rock

and the

Financial Crisis

, the

Walker Review

produced a

report

focused

on

the

banking

industry,

but

also

with

recommendations

for

all companies.

[5]

In 2010, a new

Stewardship Code

was issued by the

Financial

Reporting

Council

,

along

with

a

new

version

of

the

UK

Corporate

Governance Code, hence separating the issues from one another.

[

edit

] Contents

Section A: Leadership

Every

company

should

be

headed

by

an

effective

board

which

is

collectively

responsible for the long-term success of the company.

There should be a clear division of responsibilities at the head of the

company

between

the

running

of

the

board

and

the

executive

responsibility

for

the

running

of

the

company’s

business.

No

one

individual

should

have

unfettered powers of decision.

The

chairman

is

responsible

for

leadership

of

the

board

and

ensuring

its

effectiveness on all aspects of its role.

As part of their role as members of a unitary board, non-executive

directors

should

constructively

challenge

and

help

develop

proposals

on

strategy.

Section B: Effectiveness

The

board

and

its

committees

should

have

the

appropriate

balance

of

skills,

experience, independence and knowledge of the company to enable them to

discharge their respective duties and responsibilities effectively.

There should be a formal, rigorous and transparent procedure for the

appointment of new directors to the board.

All directors should be able to allocate sufficient time to the company

to discharge their responsibilities effectively.

All directors should receive induction on joining the board and should

regularly update and refresh their skills and knowledge.

The

board

should

be

supplied

in

a

timely

manner

with

information

in

a

form

and of a quality appropriate to enable it to discharge its duties. The

board

should

undertake

a

formal

and

rigorous

annual

evaluation

of

its

own

performance and that of its committees and individual directors.

All

directors

should

be

submitted

for

re- election

at

regular

intervals,

subject to continued satisfactory performance.

Section C: Accountability

The

board

should

present

a

balanced

and

understandable

assessment

of

the

company’s position and prospects.

The board is responsible for determining the nature and extent of the

significant risks it is willing to take in achieving its strategic

objectives.

The

board

should

maintain

sound

risk

management

and

internal

control systems.

The board should establish formal and transparent arrangements for

considering how they should apply the corporate reporting and risk

management and internal control principles and for maintaining an

appropriate relationship with the company’s auditor.

Section D: Remuneration

Levels of remuneration should be sufficient to attract, retain and

motivate

directors

of

the

quality

required

to

run

the

company

successfully,

but

a

company

should

avoid

paying

more

than

is

necessary

for

this

purpose.

A

significant

proportion

of

executive

directors’

remunerati

on

should

be

structured

so

as

to

link

rewards

to

corporate

and

individual

performance.

There

should

be

a

formal

and

transparent

procedure

for

developing

policy

on executive remuneration and for fixing the remuneration packages of

individual directors. No director should be involved in deciding his or

her own remuneration.

Section E: Relations with Shareholders