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7 Cards in this Set
- Front
- Back
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Explain whether listedcompanies in the UK have to follow best practice from the UK CorporateGovernance Code, and what the consequences may be if they do not. |
- “Comply or explain” principle - Failure to comply may result in thesecturities being removed from listing, or morelikely censure by the FinancialConduct Authority. |
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Do you consider that too muchis expected of the non-executive directors in the corporate governance processin listed companies? EXAM identification theory |
- yes, they need to be aware of what is happening in the company and in the wider context of shareholders' interests |
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Give an evaluation of the different roles playedby the rules in the Combined Code on Corporate Governance compared with legalrules from statute and case law in relation to the control of self-servingbehaviour on the part of the directors of listed companies. |
· It is certain that section 994of CA 2006 often contains allegations that the controllers acted both in breachof an informal agreement among the shareholders and in breach of theirfiduciary duties, usually by engaging in some form of self-dealing of corporateopportunities. Some courts have also been prepared to bring at leastself-serving negligence within the scope of section 994. |
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Discuss the extent to which youconsider that the current legal framework enables shareholders to play aneffective part in corporate governance. |
· Foss v Harbottle i. Minority shareholders have a right to bring a claimby way of using derivative action to represent a company. |
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Is there a case for consideringthe adopting of two-tier boards for UK listed companies, the representatives ofemployees on the supervisory board? What might be the advantages anddisadvantages? |
a. Under the two-tiersystem, the board of directors and the supervisory board exist side by side. b. For the purpose ofmonitoring the company's management, the members of the company are obliged toelect a supervisory board. The supervisory board also acts as an independentbody and its members may not be instructed in this capacity by shareholders or bythe employer |
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5. Should the law be used to ensure that the boards of listed companies embrace diversity in theircomposition? |
not sure |
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5. Discuss the lessons learned byBP about corporate governance in the light of the Gulf of Mexico oil spill,discussed in Lin-Hi and Blumberg's article. |
1. It reflects the real world – something every company should be sensitive to. 2. Healthy debate can lead to better decisions.3. Divergent backgrounds mean tackling the same idea in differing ways. 4. Great ideas come from disruption of the status quo. 5. Your clients and customers are diverse. 6. This can make your company knowledgeable and sensitive to a wider variety of groups.7. Counsel from a variety of authorities is sensible. 8. Setting an example at the top will hopefully have a trickle-down effect within the organization. 9. Improved reputation and brand. 10. A variety of backgrounds can make the company more adaptable to its ever changing environment. |
