Wednesday, September 22, 2010

UK: The Government's Review of Corporate Governance

Via Corporate Law and Governance.
The Department for Business, Innovation and Skills has announced some details about its forthcoming review of corporate governance: see its press release here. Given the scope of the review, it has the potential to be the most wide reaching and important undertaken in recent years. In the press release, the BIS Secretary, Dr Cable, is quoted as follows:
“We will look at the economic impact of takeovers, shareholder responsibility, corporate incentives and pay – all the factors that can help us build a framework founded on long-term economic logic. Short-termism and shareholder disengagement are an increasing problem for our economy. Short-term investors and financial gamblers value a quick buck above all else, for example, by driving company boards into accepting takeover bids that make no economic sense. We need shareholders that act like long-term owners, alive to the risks of instability and the broader consequences of how the companies they own behave.

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