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.
Introduction
1 Corporate governance the historical background
Pre-modern times; Emergence of the pre-modern corporation; The modern corporation; Emergence of the ‘corporate governance’ concept; Theories of corporate governance; The Cadbury Report; SarbanesOxley; Notes
2 Corporate governance in the United States
SarbanesOxley (SOX); Review of SOX; NYSE corporate governance rules; Overseas companies listed on the NYSE; Notes
3 Corporate governance in the EU
OECD corporate governance; Statutory framework for corporate governance in Europe; Non-statutory corporate governance in Europe; Financial reporting and audit convergence; Notes
4 Corporate governance in the UK the statutory framework
The UK limited liability company; The Companies Act 2006; Overview of the structure of the Companies Act 2006; Core provisions of the Companies Act 2006; Notes
5 Corporate governance in the UK the non-statutory framework
Cadbury, Greenbury and Hampel; Turnbull; Myners; Hyperactivity; Smaller companies sector; Notes
6 The Listing Rules and the Combined Code on Corporate Governance
Sanctions available to the UKLA; Requirement to comply with the Combined Code; The Combined Code on Corporate Governance; Notes
7 Duties of directors
What are directors?; Fiduciary duties; Statutory provisions relating to company directors; Meetings of directors; Delegation of powers; Notes
8 The board
A1 The board; A2 Chairman and chief executive; A3 Board balance and independence; A4 Appointments to the board; A5 Information and professional development; A6 Performance evaluation; A7 Re-election; Notes
9 The company secretary
Company secretary statutory framework; Notes
10 Directors’ remuneration
Directors’ remuneration statutory framework; Directors’ remuneration non-statutory framework; Notes
11 The Combined Code and financial reporting
The statutory framework for financial reporting; Accounting standards; Auditor’s report; Audit qualifications; Note
12 Risk management
Risk management and corporate governance; Risk assessment and risk management; Risk assessment; Controls; Risk management; BIS and Basel 2; Basel 2 and operational risk; ERM framework; COSO ERM framework; Notes
13 Internal control and the Turnbull Guidance
Internal controls and audit; COSO; PCAOB; Turnbull: guidance on internal control; Notes
14 The audit and auditors
Regulation of auditors; The EU perspective; Statutory audit framework; The auditor’s liability; What is internal audit?; What is IT audit?; Notes
15 The audit committee
Audit committee; Appointing auditors; Internal auditors; Note
16 Relations with shareholders
Statutory framework for relations with shareholders; Shareholder relations non-statutory framework; Notes
17 Corporate governance in the UK public sector
The UK public sector; The Nolan Report the Committee on Standards in Public Life; UK Audit Commission on UK public sector corporate governance; Who is responsible for corporate governance in the public sector?; Local government; Health; Targets, regulation, inspection and audit; The Good Governance Standard for Public Services; Audit committees in the public sector; Public sector risk management; Publicprivate sector partnerships; Notes
18 IT governance
IT governance defined; The information economy and intellectual capital; Competitiveness; Compliance risk; Information risk; Project governance; What is in an IT governance framework?; IT steering committee; Enterprise IT architecture committee; IT audit; Notes
19 Corporate social responsibility
OECD Guidelines; UK approach to CSR; CSR reporting standards; Notes
Appendices:
Appendix 1 Table of contents: the Companies Act 2006
Appendix 2 The Combined Code on Corporate Governance
Appendix 3 Corporate Governance Guidelines for AIM Companies
Appendix 4 Summary of the Nolan Committee’s First Report on Standards in Public Life
Appendix 5 Model terms of reference
Appendix 6 Directors’ Remuneration Report Regulations 2002, Schedule 7A
Appendix 7 Useful websites
Appendix 8 Useful and further reading
Index
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.
Anonymous
Posted June 22, 2008
Alan Calder¿s masterful new work allows the reader to become much more familiar with the practice and the main principles of what we now call the `governance¿ of a company. He introduces the newly used (and slightly ridiculous) title of `governance¿ as a strategy by writing that ¿corporate governance has become critical for all medium and large organisations. Those without a governance strategy face significant risks those with one perform measurably better.¿ Certainly, but what¿ new except a change of word from `running¿ to `governance¿ (to incorporate compliance)! Calder goes on to state his aim is ¿to provide a clear description for managers and executives that will enable them to identify the practical steps necessary to meet today¿s corporate governance requirements¿. So, has he succeeded in this aim? Yes, and very well indeed with a readable work for the non-lawyer- no cases and statutes in the body text, and useful notes at the end of each chapter. The book has 19 chapters and 8 appendices (where the legal bit is). This is a down to earth book which explodes the celebrity nonsense of `greed is good¿ making way for `looting is good¿ and the repeated challenging behaviour exhibited with the spate of collapses and failures greeting this new century with its uncertainty and sub-prime bad management practices still rife. Calder should be required reading for directors and shareholders with his chatty style which deals so well with what running a company today means for you, your name in business and how much money you can make. He identifies that studies have shown that share price is often linked to the effective governance (running) or otherwise of the company itself. This price is reflected by providing board members and managers with a string financial incentive to maintain effective corporate governance practices (well covered in the appendices). The great benefit of this book is how Calder covers what should constitute good governance (which varies in different countries and companies as we all know) so that there can never be a `one size fits all¿ model for corporate governance. Alan Calder¿s book is timely with his coverage of the United Kingdom¿s consolidating Companies Act 2006 (one of the largest pieces of legislation ever passing through our Parliament) and the American Sarbanes-Oxley Act which gives us the current direction in which businesses must go to be successful¿and compliant. This is a practical guide that gives clear and concise information on what makes for good corporate governance and I hope that some notice is taken of the propositions put forward because of past behaviour by directors, investors and staff. He sets out the duties and obligations of company directors and puts today¿s corporate governance of day-to-day business in perspective. Fortunately, most directors are law-abiding business people. `Corporate governance¿, or running your company legally (and, possibly with a bit of morality to cater for global concerns!) may seem another extension of the nanny state or ¿like unnecessary bureaucracy and red tape that interferes with the effective management of their company¿ but Alan Calder achieves his objective with a book designed to give all types of director directional clarity about what is¿and what is not¿the acceptable practice with their businesses. It will be fascinating to see what he does with a possible future edition as our global business and financial community develops, and I am sure Mr Calder will be up to the challenge at the time, notwithstanding the unforeseen which has made the business of business so exciting down the ages. Phillip Taylor MBE. Barrister-at-Law
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Overview
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...