Corporate Governance Code and the Satutory Provision Responsible for Regulating listed PLC’s

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This essay would be discussing the extent to which the corporate governance code and the statutory provision responsible for regulating listed PLC’s have addressed the concerns arisen from recent corporate scandals.

Corporate governance is the “framework of rules and practices by which a board of directors ensures accountability, fairness and transparency in the firms relationship with all its stakeholders” . The stakeholders include financiers, customers, employees, management, government and the community. It is essential that a system be put in place to monitor the actions of the board.

The combined code sets out standards of good practice in relation to board practices and effectiveness, remuneration, accountability and relations with shareholders . Listed companies are required to report on how they have applied the main principles of the code, and either confirm that the code provision was complied with, or provide explanation for non-compliance.

Recent Corporate Scandals

The reform of the UK listed companies happened as a result of the scandal and recession in the late 1980s and early 1990s.The collapse of three companies (BCCI, Polly Peck and Robert Maxwell Group) all of whom were certified by their auditors as having clean records but yet collapsed unexpectedly, had a negative impact on market confidence regarding the accountability of listed companies .

BCCI has been described to be Britain’s biggest banking scandal with debts of up to $17 billion. Their activities included dubious lending, fraudulent record keeping and money laundering to name a few . This scandal emphasised the need for powerful executives to be made accountable and controlled within a corporate governance structure.

The problem id...

... middle of paper ...

...nancial Reporting council- Review of the effectiveness of the combined code second consultation comments from the ACCA

http://www.guardian.co.uk/business/2010/aug/26/polly-peck-business-asil-nadir How Polly Peck went from hero to villain in the City- Asil Nadir's company diversified to become global giant, before collapsing with £1.3bn debts Assessed August 26 2010

http://www.nytimes.com/1991/12/10/business/worldbusiness/10iht-max__2.html How to account for Maxwell scandal Assessed December 1st 1991

http://www.erisk.com/learning/CaseStudies/BankofCreditandCommerceIn.asp Case Study Bank of credit and commerce international Assessed June 2001

http://www.independent.co.uk/news/business/news/wyevale-rebels-oust-chairman-but-attempt-to-seize-control-fails-520500.html Wyevale rebels oust chairman but attempt to seize control fails Assessed Friday 23rd December

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