The following In House Advisor guidance note Produced in partnership with Martin Webster and Tom Garbett of Pinsent Masons provides comprehensive and up to date legal information covering:
This Practice Note provides an introduction to corporate governance for in-house lawyers new to the role, focusing on the narrow concept of corporate governance, ie the rules and regulations which certain companies are obliged to follow, rather than an overarching review of how companies are run.
Corporate governance refers to the legal, regulatory and voluntary frameworks which address how companies are effectively managed. It is described in the 1992 Cadbury Report as ‘...the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders' role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place’.
In the context of recent high-profile corporate governance failures, the government's 2016 Green Paper on the subject emphasised that ‘the purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of a company’.
It further identified two broad elements, which it progressed in its 2017 response:
providing a framework for protecting the interests of shareholders where they are distant from the directors running a company, while
ensuring the interests of employees, customers, suppliers and others with a direct interest in the performance of a company are taken into account
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