Get 20M+ Full-Text Papers For Less Than $1.50/day. Subscribe now for You or Your Team.

Learn More →

Comply or explain in corporate governance codes: in need of greater regulatory oversight?

Comply or explain in corporate governance codes: in need of greater regulatory oversight? <jats:p>At the heart of the voluntary corporate governance code in the UK and elsewhere is the concept of ‘comply or explain’. It provides that a company is to comply with a code's provision; but if it does not do so, then it is to state that it does not and explain why it does not. There is no provision in the UK for any statements by companies to be assessed by any regulatory body. It is incumbent on the markets generally and the company's shareholders specifically to determine whether the response of the company to code provisions does enough, and then to take some action if they do not. The aim of comply or explain is to empower shareholders to make an informed evaluation as to whether non-compliance is justified, given the company's circumstances. This paper assesses whether the present scheme, which relies on the stewardship of shareholders and the efficiency of the markets, should continue, or whether a regulatory body should be empowered to determine whether companies are in fact complying with code provisions or, if not, whether they are providing adequate explanations for not complying.</jats:p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Legal Studies CrossRef

Comply or explain in corporate governance codes: in need of greater regulatory oversight?

Legal Studies , Volume 34 (2): 279-304 – Jun 1, 2014

Comply or explain in corporate governance codes: in need of greater regulatory oversight?


Abstract

<jats:p>At the heart of the voluntary corporate governance code in the UK and elsewhere is the concept of ‘comply or explain’. It provides that a company is to comply with a code's provision; but if it does not do so, then it is to state that it does not and explain why it does not. There is no provision in the UK for any statements by companies to be assessed by any regulatory body. It is incumbent on the markets generally and the company's shareholders specifically to determine whether the response of the company to code provisions does enough, and then to take some action if they do not. The aim of comply or explain is to empower shareholders to make an informed evaluation as to whether non-compliance is justified, given the company's circumstances. This paper assesses whether the present scheme, which relies on the stewardship of shareholders and the efficiency of the markets, should continue, or whether a regulatory body should be empowered to determine whether companies are in fact complying with code provisions or, if not, whether they are providing adequate explanations for not complying.</jats:p>

Loading next page...
 
/lp/crossref/comply-or-explain-in-corporate-governance-codes-in-need-of-greater-Y0K0duN3AF

References (22)

Publisher
CrossRef
ISSN
0261-3875
DOI
10.1111/lest.12014
Publisher site
See Article on Publisher Site

Abstract

<jats:p>At the heart of the voluntary corporate governance code in the UK and elsewhere is the concept of ‘comply or explain’. It provides that a company is to comply with a code's provision; but if it does not do so, then it is to state that it does not and explain why it does not. There is no provision in the UK for any statements by companies to be assessed by any regulatory body. It is incumbent on the markets generally and the company's shareholders specifically to determine whether the response of the company to code provisions does enough, and then to take some action if they do not. The aim of comply or explain is to empower shareholders to make an informed evaluation as to whether non-compliance is justified, given the company's circumstances. This paper assesses whether the present scheme, which relies on the stewardship of shareholders and the efficiency of the markets, should continue, or whether a regulatory body should be empowered to determine whether companies are in fact complying with code provisions or, if not, whether they are providing adequate explanations for not complying.</jats:p>

Journal

Legal StudiesCrossRef

Published: Jun 1, 2014

There are no references for this article.