To What Extent Do You Agree with the Statement That Problems Relating to Corporate Governance in the Uk Have Been Resolved Now That Non Executive Directors Play a Key Role

To what extent do you agree with the statement that problems relating to corporate governance in the UK have been resolved now that non executive directors play a key role.

Corporate governance has emerged as a national and international issue (Cadbury 2002, Kiel and Nicholson 2003b) that has resulted in increasing attention being paid to issues such as the effectiveness of reporting disclosure, roles of the board, internal controls, audit committees and the independence of directors and auditors.   A number of high profile corporate collapses in Australia (for example: Ansett, Harris Scarfe, HIH) and overseas (for example; Enron, WorldCom, and Parmalat) have led to much discussion on accountability, regulations and professional codes ( Tomasic 2001; Carver and Oliver 2002; Cadbury 2002; Vinten 2002; Taylor 2003).    

The current debate on corporate governance issues has raised more public awareness and suggested that the investment community needs to be more critical of the way companies are managed (Horwath 2002). As a result of this surge in awareness by investors and shareholders, directors are being held increasingly responsible for company performance (and any public controversy); as well as being held personally accountable for their company’s legal compliance and social responsibility.

‘Corporate governance’ tends to be looked as a new term that has crept into our business vocabulary especially in the last 10 years. However if we are to equate accountability with corporate governance (Cadbury 1992) then in reality this is not a new issue; it has evolved with the growth of the capitalist system and the development of world economies (Vinten 2003). We still have the same issues to consider.   What is accountability? Who is accountable to whom? What role do directors play? What role do shareholders and other stakeholders such as creditors and employee have? How do we promote corporate accountability? What board structures work the best?   What is the... [continues]

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