Wednesday, October 20, 2010

Financial Reporting Council : The UK Approach to Corporate Governance

An updated edition of the Financial Reporting Council publication The UK Approach to Corporate Governance has been published this month.

The UK approach combines high standards of corporate governance with relatively low associated costs. In a September 2009 report by Governance Metrics International, the UK ranked second in a table showing average governance performance by companies in different countries.

It is proportionate and capable of dealing with a wide variety of   ircumstances. There is a relative lack of prescription as to how a company’s board organises itself and exercises its responsibilities. The UK Corporate Governance Code identifies good governance practices, but companies can choose to adopt a different approach if that is more appropriate to their circumstances.

The key relationship is between the company and its shareholders, not between the company and the securities regulator or stock exchange. Boards and shareholders are encouraged to engage in dialogue on corporate governance matters. Shareholders have voting rights and rights to information, set out in company law and the Listing Rules, which enable them to hold the board to account.

For complete report see here (pdf).

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