Corporate Governance
Does the Corporate Governance Maximise Shareholders’ Wealth? | ITV PLC | | | | |
Introduction/Key Objectives
The main purpose of this report is to find out whether Corporate Governance (CG) does maximise shareholders’ wealth within a selected company. ITV PLC is the selected company for this report; their Annual Report (AR) 2011 will be used for statistical evidence. Also, existing theories will be applied to ITV PLC for qualitative evidence. Recommendations and advice will be given to help the company benefit from it in the future.
Cadbury Committee produced the first version of the UK Corporate Governance Code in 1992 where they stated ‘’Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to laws, regulations and the shareholders in general meeting.’’ (FRC)
‘’ITV is the largest commercial television network in the UK’’ (ITV), they provide their services through platforms such as ITV Player and itv.com. ITV also operates worldwide and currently has offices in the US, Germany, Australia, Sweden and France.
Critical evaluation
ITV produces a Governance Report along with their Annual Report so that their investors and stakeholders can see that they complied with the requirements of the Corporate Governance Code. This report includes ‘’how the board works, effectiveness, accountability, relations with shareholders, audit committee report and remuneration report.’’ (AR, Page 56)
The diagram provided (see Appendix 1) shows
Introduction/Key Objectives
The main purpose of this report is to find out whether Corporate Governance (CG) does maximise shareholders’ wealth within a selected company. ITV PLC is the selected company for this report; their Annual Report (AR) 2011 will be used for statistical evidence. Also, existing theories will be applied to ITV PLC for qualitative evidence. Recommendations and advice will be given to help the company benefit from it in the future.
Cadbury Committee produced the first version of the UK Corporate Governance Code in 1992 where they stated ‘’Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to laws, regulations and the shareholders in general meeting.’’ (FRC)
‘’ITV is the largest commercial television network in the UK’’ (ITV), they provide their services through platforms such as ITV Player and itv.com. ITV also operates worldwide and currently has offices in the US, Germany, Australia, Sweden and France.
Critical evaluation
ITV produces a Governance Report along with their Annual Report so that their investors and stakeholders can see that they complied with the requirements of the Corporate Governance Code. This report includes ‘’how the board works, effectiveness, accountability, relations with shareholders, audit committee report and remuneration report.’’ (AR, Page 56)
The diagram provided (see Appendix 1) shows
References: ITV PLC Annual Report (2011). Retrieved December 13, 2012, from http://www.itvplc.com/sites/itvplc/files/ITV%202011%20Annual%20Report%20and%20Accounts.pdf FRC – Financial Reporting Council (2012) https://www.frc.org.uk/getattachment/a7f0aa3a-57dd-4341-b3e8-ffa99899e154/UK-Corporate-Governance-Code-September-2012.aspx ITV PLC, About ITV: What we do, Retrieved December 13, 2012, from http://www.itvplc.com/about/what-we-do