As context for responses to the Pressure Points consultation, four discussion papers provide information on the current system of corporate governance in the US and the UK.
The discussion papers aim to:
The discussion papers are as follows:
Effective corporate governance frameworks: encouraging enterprise and market confidence
Effective corporate governance frameworks promote prosperity, market confidence and public trust. The US and the UK are among the world's most successful economies, each with a long history of corporate governance. This paper explores how policy makers are challenged with striking the right balance between market forces and regulation in supporting internationally recognised principles of responsibility, accountability, transparency and fairness.
Board responsibilities and creating value: demonstrating leadership and accountability
Boards of directors are responsible for acting in the long-term best interests of the company for the benefit of shareholders. Effective boards require skilled leadership, balanced decision-making, informed risk-taking, good judgment and integrity. This paper explores how US and UK boards operate differently and the role, responsibilities and powers of directors in each jurisdiction.
Shareholder responsibilities and the investing public: exercising ownership rights through engagement
Institutional investors play a significant role in the governance of companies in the US and the UK. They are the guardians of other people's money through the management of pensions, insurance and savings products and are expected to act responsibly in exercising ownership rights through engagement. This paper explores the role of shareholders in corporate governance and their rights and responsibilities.
Disclosure responsibilities and building trust: promoting transparent and reliable information
The disclosure of meaningful, reliable and timely information to shareholders is of fundamental importance for informed investment decision-making and market confidence. High levels of financial disclosure are characteristic of both US and UK corporate governance models. This paper explores the role of the accountancy profession in helping to facilitate the flow of capital through transparent, efficient and trusted information.
Each paper is relevant to specific sections of the consultation and refers to issues of interest to policy makers, the business and investment communities and the accountancy profession.
Corporate governance is a broad and evolving discipline. The discussion papers are not designed to cover every aspect of corporate governance and generally refer to issues relevant to large, publicly quoted companies and institutional investors.