Corporate Governance: Higgs Report & Revised Combined Code

bay windoworate Governance (Higgs Report + Revised combine Code) It is so clear that non-executive directors make an essential contribution to good corporate regime that the law should be changed to look at all listed companies to have a volume of such directors on their scorecards. Discuss. The statement seems to suggest that the comprehension of non-executive directors (NEDs) into the board of listed companies have been a runaway success. This is easily rebutted by the circumstance that even bigger recent corporate scandals like Enron Corp and the fall of Lehmann Brothers happened in spite of having, in some cases, a majority NED board. But this is not to say that the inclusion of NEDs should be scrapped altogether. They still do march a significant purpose. From the Cadbury Report in 1992 to the Revised Combined Code (the Code) of 2003, the role of NEDs have been important, if not central, to these brushup efforts in improving corporate governance standards in the UK. The Higgs Report in particular, whose recommendations were largely followed in the 2003 Code, espoused increasing the role and effectiveness of NEDs in UKs corporate governance.

The emphasis on NEDs is clear especially when the Code requires companies to adopt its provisions and principles or otherwise require the plc to explain why they chose not to do so. The underlying principle for the inclusion of NEDs into the board of directors is due to the fact that the UK adopts a unitary board model. They would serve as an essential check and balance to the engagement of executive powers in such a model. The need for this is all the more(prenominal) imperative considering that all corporate powers of a company are vested in a single body whose composition is determined by majority shareholders. This naturally gives rise to a conflict amid the interest of the company and the interest of the majority shareholder(s). If left unchecked, foil and disclosure suffers and other means of... If you want to get a unspoilt essay, order it on our website: Orderessay

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