The report was published of an independent review of corporate governance in the banking industry. It recommended strengthening the role of non-executives and giving them new responsibilities to monitor risk and remuneration. It also called for a stewardship duty on institutional shareholders to play a more active role as owners of businesses. But it rejected calls to name individuals in receipt of pay packages worth £1 million or more. The government said that it would 'move quickly' to implement the reforms.
Source: A Review of Corporate Governance in UK Banks and Other Financial Industry Entities: Final recommendations, Walker Review/HM Treasury (020 7270 4558)
Links: Report | Hansard | HMT press release | BBC report
Date: 2009-Nov
The government published a Financial Services Bill, and the Bill was given a second reading. The Bill was designed to give the Financial Services Authority powers to void contracts signed by bankers and their employers after 1 January 2010 if it believed that the pay structures encouraged the individual to take too much risk. The Bill would also give the FSA powers to impose a new levy on banks to pay for a consumer protection agency. Consumers would be given the right for the first time to take 'class action' law suits in cases of large-scale mis-selling of financial products.
Source: Financial Services Bill, HM Treasury, TSO (0870 600 5522) | House of Commons Hansard, Debate 30 November 2009, columns 872-937, TSO (0870 600 5522)
Links: Text of Bill | Explanatory notes | HMT press release | Hansard | Citizens Advice press release | BBA press release | CBI press release | CIPD press release | Barnardos press release | AIC press release | ABI press release | BBC report | Guardian report | People Management report | Personnel Today report
Date: 2009-Nov
Official guidelines said that companies and organizations that caused death through gross breaches of care should face 'punitive and significant' fines.
Source: Corporate Manslaughter and Health and Safety Offences Causing Death, Sentencing Guidelines Council
Links: Guideline | SAP press release
Date: 2009-Oct
A report outlined the arguments for a High Pay Commission, designed to mitigate the damaging social and economic effects of excessive pay rates, and examined how such a Commission might work.
Source: Never Again! Why Britain needs a High Pay Commission, Compass (020 7463 0633)
Links: Report | PIRC press release
Date: 2009-Sep
A report called for a more resilient, socially focused banking system. It explored the concept of 'responsible finance', especially community reinvestment banking. Responsible finance would place obligations upon banks and other financial institutions to be socially aware in providing credit and banking services to lower-income individuals, and to provide benefits to local communities and small businesses.
Source: Jessica Arnold and Richard Muscat, Banking on Change: Community reinvestment and re-thinking the UK financial system, Centre for Local Economic Strategies (0131 650 9166) and Urban Forum
Links: Report
Date: 2009-Sep
A report by a committee of MPs said that the government and the financial services regulator had been too complacent about the bonus culture in the City of London that had caused the 'reckless and excessive risk-taking' at the heart of the banking crisis.
Source: Banking Crisis: Reforming corporate governance and pay in the City, Ninth Report (Session 2008-09), HC 519, House of Commons Treasury Select Committee, TSO (0870 600 5522)
Links: Report | PIRC press release | BBA press release | CIPD press release | Telegraph report | Guardian report | People Management report | Personnel Today report
Date: 2009-May
A manifesto was published for corporate governance and capital market reform, covering board competence, executive remuneration, shareholder engagement, and the state's role as an owner.
Source: Beyond the Crisis: PIRC's manifesto for corporate governance and capital market reform, Pensions and Investment Research Consultants Limited (020 7247 2323)
Links: Manifesto | PIRC press release | Professional Pensions report
Date: 2009-Apr
A paper examined the idea that the Companies Act 2006 followed the European model of corporate regulation, to the extent of 'giving legitimate voice to social and environmental issues'. It said that the new disclosure requirements owed more to the interests of institutional investors than community activism; and that there remained deep-seated divisions among institutional investors (especially different types of pension funds) over disclosure policy.
Source: Gordon Clark and Eric Knight, Institutional Investors, the Political Economy of Corporate Disclosure, and the Market for Corporate Social Responsibility: Implications from the UK Companies Act (2006), Working Paper 08-09, Centre for Employment, Work and Finance/University of Oxford (01865 285070)
Links: Paper
Date: 2009-Apr