Lessons from the UK
Lessons from the UK 
Following the global financial crisis there are many lessons that can be learnt from the UK. Groups with international interests and subsidiaries were particularly vulnerable as it came to light that there was no overall view of the group’s position and risk controls were limited. The Walker Review and FRC Combined Code Review (now updated and renamed as the UK Corporate Governance Code) highlighted some notable lessons that can be applied globally.
Key Lessons
- Corporate Governance and in particular Board Governance needs to be reviewed and strengthened
- Overall risk must be co-ordinated by a Risk Committee and a Chief Risk Officer, independent of any business division. Too many companies and groups were unaware of their overall risk position.
- Independent Directors need greater specialist industry knowledge. They have an important role to play and must act with due diligence and speak out when they have concerns. Independent/ Non-Executive Directors were found to be lacking in knowledge and commitment.
- Board Committees need a greater balance of knowledgeable Independent directors to circumvent issues being missed.
The Senior Independent Director needs to ensure that other independent directors are fulfilling their roles appropriately. Too many Boards were ‘rubber-stamping’ board papers.
- Boards need greater interaction with their major shareholders, in particular the Chairman and Senior Independent Director. Boards were found to be largely unaware of their shareholders actions and views.
- Institutional shareholders must liaise with the companies they are invested in more frequently and they have a duty to ask more questions. Institutional investors have a duty of care to their underlying investors and were not fulfilling this role satisfactorily in many cases.
- In particular where there were Global Groups and Multi-Regulators there were found to be controls and communication severely lacking.
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CTP Global – Good Governance: Great Performance
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