Corporate Governance : A Practical Guide to the Legal Frameworks and International Codes of Practice

by Calder, Alan

• ISBN13: 9780749448172
• ISBN10: 0749448172
• Format: Hardcover
• Copyright: 2008-05-01
• Publisher: Kogan Page Ltd

Summary

Studies have shown that a company's share price is often linked to how well governed the company is, providing board members with a strong financial incentive to maintain good corporate governance practices. Yet what may constitute good governance will vary across different countries and companies. There is no "one size fits all" model of corporate governance. Corporate Governance will help readers become familiar with the principles and practice of good governance appropriate to their companies, enabling them to uphold those standards that will improve their corporate reputation while providing reassurance to market regulators. Written for directors of companies large and small, it answers every question about what good corporate governance means for a company's reputation and its share price.

Author Biography

Alan Calder is founder-director of IT Governance Ltd, which provides IT governance and information security services. He is the author of International IT Governance and A Business Guide to Information Security, both published by Kogan Page.

Table of Contents

Introduction	p. 1
Corporate governance - the historical background	p. 6
Pre-modern times	p. 6
Emergence of the pre-modern corporation	p. 7
The modern corporation	p. 8
Emergence of the 'corporate governance' concept	p. 10
Theories of corporate governance	p. 10
The Cadbury Report	p. 11
Sarbanes-Oxley	p. 14
Notes	p. 15
Corporate governance in the United States	p. 16
Sarbanes-Oxley (SOX)	p. 16
Review of SOX	p. 20
NYSE corporate governance rules	p. 20
Overseas companies listed on the NYSE	p. 21
Notes	p. 21
Corporate governance in the European Union	p. 23
OECD corporate governance	p. 24
Statutory framework for corporate governance in Europe	p. 25
Non-statutory corporate governance in Europe	p. 26
Financial reporting and audit convergence	p. 27
Notes	p. 30
Corporate governance in the United Kingdom - the statutory framework	p. 31
The UK limited liability company	p. 32
The Companies Act 2006	p. 33
Overview of the structure of the Companies Act 2006	p. 34
Core provisions of the Companies Act 2006	p. 36
Notes	p. 38
Corporate governance in the United Kingdom - the non-statutory framework	p. 39
Cadbury, Greenbury and Hampel	p. 39
Turnbull	p. 41
Myners	p. 41
Hyperactivity	p. 42
Smaller companies sector	p. 45
Notes	p. 46
The Listing Rules and the Combined Code on Corporate Governance	p. 47
Sanctions available to the UKLA	p. 50
Requirement to comply with the Combined Code	p. 50
The Combined Code on Corporate Governance	p. 51
Notes	p. 54
Duties of directors	p. 56
What are directors?	p. 57
Fiduciary duties	p. 57
Statutory provisions relating to company directors	p. 58
Meetings of directors	p. 63
Delegation of powers	p. 64
Notes	p. 65
The board	p. 67
The board	p. 67
The Chairman and chief executive	p. 69
Board balance and independence	p. 70
Appointments to the board	p. 71
Information and professional development	p. 72
Performance evaluation	p. 73
Re-election	p. 73
Notes	p. 74
The company secretary	p. 75
Company secretary - statutory framework	p. 75
Notes	p. 78
Directors' remuneration	p. 79
Directors' remuneration - statutory framework	p. 79
Directors' remuneration - non-statutory framework	p. 83
Notes	p. 87
The Combined Code and financial reporting	p. 89
The statutory framework for financial reporting	p. 89
Accounting standards	p. 91
Auditor's report	p. 92
Audit qualifications	p. 93
Notes	p. 94
Risk management	p. 95
Risk management and corporate governance	p. 95
Risk assessment and risk management	p. 97
Risk assessment	p. 98
Controls	p. 99
Risk management	p. 99
BIS and Basel 2	p. 100
Basel 2 and operational risk	p. 101
ERM framework	p. 103
COSO ERM framework	p. 103
Notes	p. 105
Internal control and the Turnbull Guidance	p. 110
Internal controls and audit	p. 108
COSO	p. 109
PCAOB	p. 110
Turnbull: guidance on internal control	p. 111
Notes	p. 114
The audit and auditors	p. 115
Regulation of auditors	p. 115
The EU perspective	p. 116
Statutory audit framework	p. 116
The auditor's liability	p. 117
What is internal audit?	p. 118
What is IT audit?	p. 120
Notes	p. 120
The audit committee	p. 122
Audit committee	p. 122
Appointing auditors	p. 124
Internal auditors	p. 124
Note	p. 125
Relations with shareholders	p. 126
Statutory framework for relations with shareholders	p. 126
Shareholder relations - non-statutory framework	p. 130
Notes	p. 134
Corporate governance in the UK public sector	p. 136
The UK public sector	p. 136
The Nolan Report - the Committee on Standards in Public Life	p. 137
UK Audit Commission on UK public sector corporate governance	p. 139
Who is responsible for corporate governance in the public sector?	p. 141
Local government	p. 141
Health	p. 142
Targets, regulation, inspection and audit	p. 143
The Good Governance Standard for Public Services	p. 144
Audit committees in the public sector	p. 145
Public sector risk management	p. 145
Public-private sector partnerships	p. 146
Notes	p. 147
IT governance	p. 148
IT governance defined	p. 148
The information economy and intellectual capital	p. 149
Competitiveness	p. 150
Compliance risk	p. 153
Information risk	p. 154
Project governance	p. 155
What is in an IT governance framework?	p. 156
IT steering committee	p. 158
Enterprise IT architecture committee	p. 160
IT audit	p. 161
Notes	p. 161
Corporate social responsibility	p. 163
OECD Guidelines	p. 164
UK approach to CSR	p. 164
CSR reporting standards	p. 165
Notes	p. 166
Appendices
Table of contents: the Companies Act 2006	p. 168
The Combined Code on Corporate Governance	p. 236
Corporate Governance Guidelines for AIM Companies	p. 237
Summary of the Nolan Committee's First Report on Standards in Public Life	p. 241
Model terms of reference	p. 246
Directors' Remuneration Report Regulations 2002, Schedule 7A	p. 265
Useful websites	p. 276
Further reading	p. 277
Index	p. 279
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