In June 2005, the ICAEW began the Beyond the myth of Anglo-American corporate governance initiative. It aims to generate discussion and broaden debate on the differences between US and UK corporate governance systems and help to promote understanding of pressures and opportunities that arise in increasingly international capital markets.
The Emerging Issues paper was published in January 2007 and culminates from the Pressure Points consultation, a series of Discussion papers, face-to-face meetings and two Transatlantic Roundtables.
The Pressure Points consultation was published in December 2005. It highlights 21 questions representing some of the most challenging aspects of cross-border corporate governance and is relevant to boards, investors, the accountancy profession and policy makers.
Emerging Issues summarises the findings to the 21 questions in the Pressure Points consultation which have been developed after face-to-face engagement with practitioners and commentators.
Four discussion papers provide background information on US and UK corporate governance systems and are as follows:
- Policy dialogue: Effective corporate governance frameworks: encouraging enterprise and market confidence
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.
- Business dialogue: 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.
- Investment dialogue: 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.
- Accounting dialogue: Disclosure responsibilities and building trust: promoting transparent and reliable information
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.
As part of the Beyond the myth of Anglo-American corporate governance initiative, the ICAEW welcomes independent viewpoints. Divided by common language has been written by Tim Bush of Hermes Pension Management Ltd. It highlights the major differences that exist between the US and other countries surrounding the purpose, authority and enforcement of financial reporting and audit.