Tara Hogg explains how the UK intends to tackle corporate governance failures
A number of changes to the UK corporate governance regime have been proposed, principally driven by a perception that corporate governance failures in UK banks and other financial institutions (BOFI) contributed to the current financial crisis.
The Walker Report
On 26 November 2009, Sir David Walker’s final review of corporate governance in BOFI was published (the Walker Report). Some of the key final recommendations are that:
l non-executive directors (NEDs) of BOFI should have financial industry awareness and increased training and support to help them to contribute effectively at board level;
l the time commitment of the NEDs on the boards of FTSE 100-listed banks or life assurance companies should increase;
l BOFI chairmen should be proposed for election on an annual basis and the annual election of all directors;
l BOFI boards should be kept under review and committees should be externally evaluated every second or third year;
l institutional investors should more actively engage with their investee BOFI and adhere to best practice as set out in a Stewardship Code;
l separate board risk committees should be created
