An introduction to corporate governance and share schemes
Produced in partnership with Dilpa Raval of CMS and Graham Muir of CMS
An introduction to corporate governance and share schemes

The following Share Incentives practice note Produced in partnership with Dilpa Raval of CMS and Graham Muir of CMS provides comprehensive and up to date legal information covering:

  • An introduction to corporate governance and share schemes
  • What is corporate governance?
  • Corporate governance for private companies
  • The UK approach to corporate governance in relation to share schemes
  • The regulatory approach
  • Institutional investor guidelines
  • How do companies monitor their compliance with the UK Corporate Governance Code?
  • AIM companies
  • Corporate governance for financial services firms compared to other firms

This Practice Note describes:

  1. what corporate governance is

  2. corporate governance for private companies

  3. the UK approach to corporate governance in relation to share schemes, including:

    1. the regulatory approach in relation to share schemes, and

    2. institutional investor guidelines

  4. how companies monitor their compliance with the UK Corporate Governance Code (the Code), and

  5. corporate governance for financial services firms as compared to other firms

This Practice Note introduces the main concepts of corporate governance and provides links to the more detailed Practice Notes on each aspect of the regulatory and legislative elements of the UK regime and the institutional investor guidelines.

For details on the impact of Brexit on the UK corporate governance regime, see Practice Note: Brexit—the UK corporate governance regime.

What is corporate governance?

Corporate governance is, broadly, the way in which companies are managed and controlled at the top level. The corporate governance regime seeks to set up a framework so as to ensure fairness of treatment among the various stakeholders in a company. The Cadbury Report of 1992 is recognised as representing the original cornerstone of corporate governance in the UK, and describes corporate governance 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

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