Beruflich Dokumente
Kultur Dokumente
SUBMITTED BY:
JAMAICA ROSE SALAZAR
SUBMITTED TO:
PROF.CAROLINA GUERERRO
Table of Contents
In January 1995 the Confederation of British Industry (CBI) established the Study
Group on Directors' Remuneration under the chairmanship of Sir Richard Greenbury
with a remit to identify good practice in determining directors' remuneration and to
prepare a code of practice for UK PLCs. The final report of the group was published on
17 July 1995 and is usually referred to as the Greenbury report.
Review of the role and effectiveness of non-executive directors (or the "Higgs
review") was a report chaired by Derek Higgs on corporate governace commissioned by
the UK government, published on January 20, 2003. It reviewed the role and
effectiveness of non-executive directors and of the audit committee, aiming at improving
and strengthening the existing Combined Code.
There was widespread unrest after the scandals in the US, involving Enron,
WorldCom and Tyco. The US opted for legislation under the Sarbanes-Oxley Act. Higgs
strongly backed the existing non-prescriptive approach to corporate governance:
"comply or explain". Yet he advocated more provisions with more stringent criteria for
the board composition and evaluation of independent directors. He wanted to remove
some of the discretion that the Code allowed.
Role of the Non-Executive Director
Strategy: Non-executive directors should constructively challenge and contribute to the
development of strategy.
Performance: Non-executive directors should scrutinise the performance of
management in meeting agreed goals and objectives and monitor the reporting of
performance.
Risk: Non-executive directors should satisfy themselves that financial information is
accurate and that financial controls and systems of risk management are robust and
defensible.
People: Non-executive directors are responsible for determining appropriate levels of
remuneration of executive directors and have a prime role in appointing, and where
necessary removing, senior management and in succession planning.
References:
4
http://en.wikipedia.org/wiki/Cadbury_Report
https://www.icaew.com/~/media/Files/Library/subjects/corporate
%20governance/financial%20aspects%20of%20corporate%20governance.pdf
http://www.icaew.com/en/library/subject-gateways/corporate-governance/codes-andreports/rutteman-report
http://www.icaew.com/en/library/subject-gateways/corporate-governance/codes-andreports/greenbury-report
http://en.wikipedia.org/wiki/Hampel_Report
http://en.wikipedia.org/wiki/Turnbull_Report
http://en.wikipedia.org/wiki/Myners_Report
http://www.icaew.com/en/library/subject-gateways/corporate-governance/codes-andreports/higgs-report
http://en.wikipedia.org/wiki/Higgs_Report
http://en.wikipedia.org/wiki/Smith_Report