The Development and the History of the Uk Corporate Governance Code
The Development and the History of the UK Corporate Governance Code
The roots of the code mainly come from the Cadbury Committee Reports and its successor reports. (Mallin, C., 2010)
There are five sections in the Code. They are Leadership, Effectiveness, Accountability, Remuneration and Relations with Shareholders. (FRC, 2010) Section A: Leadership
A.1 The Role of the Board
An effective board is essential for every company to have long-term success. A.2 Division of Responsibilities
There should be a clear division of responsibilities 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.
A.3 The Chairman
The chairman is responsible for leading the board and ensuring the effectiveness of the board on all aspects. A.4 Non-executive Directors
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
B.1 The Composition of the Board
The board and its committees should have the appropriate skills, experience, independence and knowledge in order to discharge their respective duties and responsibilities effectively.
B.2 Appointments to the Board
When appointing new directors to the board, there should be a formal, rigorous and transparent procedure.
B.3 Commitment
All directors should allocate sufficient time to discharge their responsibilities to the company effectively.
B.4 Development
All directors should receive induction when joining the board and should regularly update and refresh their skills and knowledge.
B.5 Information and Support
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.
B.6 Evaluation
A formal and rigorous evaluation should be undertaken annually based on the performance of the
The roots of the code mainly come from the Cadbury Committee Reports and its successor reports. (Mallin, C., 2010)
There are five sections in the Code. They are Leadership, Effectiveness, Accountability, Remuneration and Relations with Shareholders. (FRC, 2010) Section A: Leadership
A.1 The Role of the Board
An effective board is essential for every company to have long-term success. A.2 Division of Responsibilities
There should be a clear division of responsibilities 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.
A.3 The Chairman
The chairman is responsible for leading the board and ensuring the effectiveness of the board on all aspects. A.4 Non-executive Directors
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
B.1 The Composition of the Board
The board and its committees should have the appropriate skills, experience, independence and knowledge in order to discharge their respective duties and responsibilities effectively.
B.2 Appointments to the Board
When appointing new directors to the board, there should be a formal, rigorous and transparent procedure.
B.3 Commitment
All directors should allocate sufficient time to discharge their responsibilities to the company effectively.
B.4 Development
All directors should receive induction when joining the board and should regularly update and refresh their skills and knowledge.
B.5 Information and Support
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.
B.6 Evaluation
A formal and rigorous evaluation should be undertaken annually based on the performance of the