The UK’s corporate governance framework has not fundamentally changed in over 25 years. But expectations of what it should achieve have. That is why the governance body ICSA has launched a major review of corporate governance reform.
While the framework may still well suited for its original task of providing better oversight on company behaviour, it is not capable of ” saving capitalism,” as many now appear to hope.
“Encouraging good business practices, punishing bad business behaviour and promoting the public interest are interrelated objectives, but they are not the same and cannot all be achieved through the same mechanisms,”says Peter Swabey, Policy and Research Director of ICSA.
Swabey says the different stands of corporate governance policy need unravelling. In particular, the UK needs to:
- Rethink its policy approach to issues such as income inequality, tackling them across the economy as a whole using tools better suited to the purpose
- Promote good governance standards in all sectors, and in other investment asset classes that receive a significant amount of money from UK investors
- Improve the effectiveness of the various mechanisms by which listed companies are held to account
- Introduce effective legal sanctions to punish bad business behaviour.
ICSA is producing a number of papers to encourage debate in these areas. Click here for more.
