- The Turner Review, “A Regulatory Response to the Global Banking Crisis”, FSA March 2009, 5. It is accessible at: www.fsa.gov.uk/pubs/other/turner_review.pdf (accessed 28 Decem ber 2010).
- M Brunnermeier, “Deciphering the 2007–08 Liquidity and Credit Crunch” (2009) 23(1) Journal of Economics Perspectives 77, 77.
- IMF, World Economic Outlook: Housing and the Business Cycle (April 2008), xi–xii, www.imf.org/external/pubs/ft/weo/2008/01/pdf/text.pdf (accessed 26 January 2011).
- B Eichengreen and K O'Rourke, “A Tale of Two Depres sions” 6 April 2009, www.voxeu.org/index.php?q=node/3421 (accessed 21 December 2010).
- A Wilmarth, “The Dark Side of Universal Banking: Financial Conglomerates and the Origins of the Subprime Financial Crisis” (2009) 41 Connecticut Law Review 963, 968.
- Ibid.
- As acknowledged by the International Corporate Govern ance Network in its “Statement on the Global Financial Crisis” 10 November 2008, para 1.4, www.iasplus.com/resource/0811icgn.pdf (accessed 22 December 2010). It has been asserted that the search for one cause is likely to be in vain: M Legg and J Harris, “How the American Dream Became Global Nightmare: An Analysis of the Causes of the Global Financial Crisis” (2009) 32 University of New South Wales Law Journal 350, 351. See the causes detailed by the Financial Crisis Inquiry Commission in the US in its “Report on the Causes of the Financial Crisis” 27 January 2011. See www.fcic.gov/files/news_pdfs/2011-0127-fcic-releases-report.pdf (accessed 3 February 2011). For the Final Report, see http://c0182732.cdn1.cloudfiles.rackspacecloud.com/fcic_final_report_full.pdf (accessed 3 February 2011).
- L Buchheit, “Did We Make Things Too Complicated?” (2008) 27(3) International Financial Law Review 24.
- T Kirchmaier, “Inject Governance, and Not Just Cash: Some Thoughts on the Governance of Banks” (27 October 2008), http://ssrn.com/abstract=130320 (accessed 4 December 2010); G Kirkpatrick, “The Corporate Governance Lessons from the Financial Crisis” (2009) 96 Financial Market Trends 1; M Peters, “Corporate Governance of Australian Banking: A Lesson in Law Reform or Good Fortune?“, http://ssrn.com/abstract=1567726 (accessed 23 June 2011); R Adams, “Governance and the Financial Crisis”, 15, http://ssrn.com/abstract=1398583 (accessed 23 June 2011); W Sahlman, “Management and the Financial Crisis (We Have Met the Enemy and He Is Us…)” 4 Harvard Business School, Working Article No 10–033, www.hbs.edu/research/pdf/10-033.pdf (accessed 28 December 2010); P Mulbert, “Corporate Governance of Banks after the Financial Crisis – Theory, Evidence, Reform,” April 2010, 8–9, http://ssrn.com/abstract=1448118 (accessed 23 June 2011); A Arora, “The Corporate Governance Failings in Financial Institutions and Directors' Legal Liability” (2011) 32 The Company Lawyer 3, 3. In addition The UK's Treasury Select Committee supports the view that corporate governance problems were a cause of the financial crisis; it stated that it had spotted “important… corporate governance failures in the banking sector” (House of Commons Treasury Committee, “Banking Crisis: Reforming Corporate Governance and Pay in the City” (Stationery Office, 2009) and quoted in M Arden, “Regulating the Conduct of Directors” (2010) 10 Journal of Corporate Law Studies 1, 1); Mulbert expresses some doubts as to whether poor corporate governance was a major cause: ibid, 27–28. Brian Cheffins posits a similar doubt: “Did Corporate Governance ‘Fail’ During the 2008 Stock Market Meltdown? The Case of the S & P 500”, http://ssrn.com/abstract=1396126 (accessed on 24 June 2010). Andrea Bel-tratti and Rene Stulz found nothing in their study that failings in banks' corporate governance caused the crisis: “Why Did Some Banks Perform Better During the Credit Crisis? A Cross Country Study of the Impact of Governance and Regulation” (July 2009), http://ssrn.com/abstract=1433502 (accessed 3 February 2011).
- “Effective Corporate Governance”, January 2010, para 1.1., http://www.fsa.gov.uk/pubs/cp/cp10_03.pdf (accessed 3 November 2011).
- Adams, supra n 9. Also, see Cheffins, supra n 9, where the learned commentator accepted that corporate governance mistakes were made more widely.
- OECD, “Financial Market Highlights – May 2008: The Recent Financial Market Turmoil, Contagion Risks and Policy Responses” (2008) 95 Financial Market Trends 9, 12. Accessible at www.oecd.org/dataoecd/55/51/40850026.pdf (accessed 20 December 2010).
- Kirchmaier, supra n 9; Kirkpatrick, supra n 9, 4; Peters, supra n 9; Arora, supra n 9, 5.
- C Jordan and A Jain, “Diversity and Resilience: Lessons from the Financial Crisis”, Research Article, Centre for Corporate Law and Securities Regulation, University of Melbourne, 8 September 2009, at p 5, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1469101 (accessed 27 December 2010).
- Sahlman, supra n 9; Kirkpatrick, supra n 9, 17–23; P Rose, “Regulating Risk by ‘Strengthening Corporate Governance’”, http://ssrn.com/abstract=1630122 (accessed 4 December 2010).
- Rose, Ibid; C Bruner, “Corporate Governance Reform in a Time of Crisis” (2011) 39 Journal of Corporation Law 309, 313. The Financial Crisis Inquiry Commission in the US in its “Report on the Causes of the Financial Crisis” 27 January 2011 saw excessive risk as a cause. See www.fcic.gov/files/news_pdfs/2011-0127-fcic-releases-report.pdf (accessed 3 February 2011). For the Final Report, see http://c0182732.cdn1.cloudfiles.rackspacecloud.com/fcic_final_report_full.pdf (accessed 3 February 2011).
- Rose, supra n 15.
- UBS AG, Shareholder Report on UBS's Write-Downs, 18 April 2008 and referred to in Rose, supra n 15.
- Wilmarth, supra n 5, 971.
- M Lipton, T Mirvis and J Lorsch, “The Proposed ‘Shareholder Bill of Rights Act of 2009'”, Harvard Law School Forum on Corporate Governance & Financial Regulation (12 May 2009), http://blogs.law.harvard.edu/corpgov/2009/05/12/the-proposed-%e2%80%9cshareholder-bill-of-rights-act-of-2009%e2%80%9d (accessed 22 December 2010); A Blinder, “Six Errors on the Path to Financial Crisis” New York Times, 24 January 2009; Brunnermeier, supra n 2; IMF Global Financial Stability Report, April, 2009; Wilmarth, supra n 5, 971. Some support for this comes from the views of company offi cials interviewed in a small study of FTSE 350 companies in the UK: see, P Taylor, “Enlightened Shareholder Value and the Companies Act 2006” (unpublished PhD thesis, Birkbeck College, University of London, May 2010), 179.
- T Wang, “Risk Sharing, (Over)Leverage, and Regulation”, www.econ.cuhk.edu.hk/dept/seminar/10-11/1st-term/risk_sharing,_leverage,_and_regulation.pdf (accessed 20 December 2010).
- “Overleverage: Excessive Debt as a Financial Risk”, http://knol.google.com/k/overleverage#(accessed 17 December 2010).
- Blinder, supra n 20.
- The IMF has sounded the warning that the problem of over-leveraging has to be addressed: IMF, Global Financial Stability Report: Responding to the Financial Crisis and Measuring Systemic Risks (April 2009), xxiii – see www.imf.org/external/pubs/ft/gfsr/2009/01/pdf/text.pdf (accessed 26 January 2011).
- P Hosking, “Royal Bank of Scotland Admits Loan Losses Hit £1.25bn in Weeks”, The Times 23 April 2008.
- Wilmarth, supra n 5, 969.
- Fifth Report of Session 2007–08, Vol 1, January 2008, HC 56–I, www.parliament.the-stationery-office.com/pa/cm200708/cmselect/cmtreasy/56/56i.pdf (accessed 28 December, 2010).
- Ibid, para 31. Also, see para 18.
- G Elliott, The Mystery of Overend & Gurney: A Financial Scandal in Victorian London (Methuen, 2006), 2–4
- C Sanati, “Prince Finally Explains His Dancing Comment”, The New York Times, 8 April 2010, and accessible at http://dealbook.blogs.nytimes.com/2010/04/08/prince-finally-explains-hisdancing-comment/(accessed22December2010).
- Ibid.
- Sahlman, supra n 9.
- S Schwarcz, “Regulating Complexity in Financial Markets” (2009) 87 Washington University Law Review 211, 255, n 246.
- J Samuelson and L Stout, “Are Executives Paid To o Much?” Wall Street Journal, 25 February 2009. Also, see Kirchmaier, supra n 9.
- A Rappaport, “The Economics of Short-term Performance Obsession” (2005) 61(3) Financial Analysts Journal 65, 72. Also, see Kirchmaier, supra n 9.
- “A Long Term Focus for Corporate Britain: A Summary of Responses,” March 2011, para 14, www.bis.gov.uk/assets/biscore/business-law/docs/s/11-797-summary-responses-long-term-focus-corporate-britain(accessed30March2011).
- V Laux, “Executive Pay, Innovation and Risk-Taking” Sep tember 2010, http://ssrn.com/abstract=1536106 (accessed 17 December 2010).
- Ibid.
- C McCreevy, “Address to the Association of European Journal ists,” 8 December 2008, address to the Association of European Journalists, http://ec.europa.eu/ireland/press_office/speeches-press_releases/mccreevy-aej-speech_en.htm (accessed 22 December 2010). Some commentators have taken issue with the view that executive pay was a reason for excessive risk-taking. For example, see Nestor Advisors, “Governance in Crisis” April 2009, 71, www.nestoradvisors.co.uk/fileadmin/user_upload/articles/USBank09.pdf (accessed 22 December 2010).
- Name of Report? Accessible at http://fsahandbook.info/FSA/html/handbook/SYSC/19A/1 (accessed 19 August 2011).
- “Revising the Remuneration Code”, www.fsa.gov.uk/pubs/policy/ps10_20.pdf (accessed 18 August 2011).
- D Walker, “A Review of Corporate Governance in UK Banks and Other Financial Industry Entities” 26 November 2009 (“Walker Review“), ch 7. See http://webarchive.nation-alarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/walker_review_261109.pdf (accessed 18 August 2011).
- Lipton et al, supra n 20.
- Ibid. Some support for this comes from the views of company officials interviewed in a small study of FTSE 350 companies in the UK: see, Taylor, supra n 20. The issue of immediate satisfaction is probably tied up with the fact that it had been said many years before the current crisis that the markets placed pressure on directors to meet their views of what results companies should be achieving. See C Williams, “A Tale of Two Trajectories” (2006) 75 Fordham Law Review 1629, 1654–55; N Sharpe, “Rethinking the Board Function in the Wake of the 2008 Financial Crisis” (2010) 5 Journal of Business and Technology Law 99, 110–11. See also J Grinyer et al, “Evidence of Managerial Short-termism in the UK” (1998) 9 British Journal of Management 13, 14, 15; J Graham et al, “The Economic Implications of Corporate Financial Reporting”, Duke University Research Article, 11 January 2005, http://ssrn.com/abstract=491627 (accessed 21 June 2010).
- Department of Business, Innovation and Skills, “A Long-Term Focus for Corporate Britain – A Call for Evidence” (October 2010), para 4.17, www.bis.gov.uk/assets/biscore/business-law/docs/l/10-1225-long-term-focus-corporate-britain.pdf (accessed 17 December 2010).
- Dean Krehmeyer (CFA Center for Financial Market Integrity and the Business Roundtable Institute for Corporate Ethics), “Breaking the Short-Term Cycle: Discussion and Recommendations on How Corporate Leaders, Asset Managers, Investors, and Analysts Can Refocus on Long-Term Value” (2006) and quoted in D Hess, “Public Pensions and the Promise of Shareholder Activism for the Next Frontier of Corporate Governance: Sustainable Economic Development” (2007) 2 Virginia Law and Business Review 221, 224.
- Supra n 45, 4. Examples of commentators are: Alan Greenspan, Francis Boyer Lecture, The American Enterprise Institute for Public Policy Research, Washington DC, 5 December 1996; Rappaport, supra n 35; M Tonello, “Revisiting Stock Market Short-termism” (2006), 5 http://ssrn.com/abstract=938466 (accessed 22 December 2010); Aspen Institute, “Overcoming Short-termism” Business and Society Program, 9 September 2009, www.aspeninstitute.org/sites/default/files/content/docs/pubs/overcome_short_state0909_0.pdf) (accessed 24 December 2010).
- For a detailed discussion of why companies engage in short-termism, see L Dallas, “Short-termism, the Financial Crisis and Corporate Governance”, http://ssrn.com/abstract=1794190 (accessed 9 May 2011).
- A Haldane, “Patience and Finance” 2 September 2010, a paper presented at the Oxford China Business Forum, Beijing, www.bankofengland.co.uk/publications/news/2010/067.htm (accessed 23 December 2010). But it has been argued that rapid trading does not necessarily meant that shareholders are dictating short-term approaches to management: G Dent, “The Essential Unity of Shareholders and the Myth of Investor Short-termism” (2010) 35 Delaware Journal of Corporate Law 97, 122.
- Haldane, Ibid.
- Supra n 45.
- Supra n 36, para 5.
- IMF, Global Financial Stability Report: Responding to the Financial Crisis and Measuring Systemic Risks (April 2009), xxiii, www.imf.org/external/pubs/ft/gfsr/2009/01/pdf/text.pdf (accessed 26 January 2011).
- FRC, “Submission on the Discussion Paper: A Long-Term Focus for Corporate Britain,” 17 January 2011, para 1, www.frc.org.uk/images/uploaded/documents/FRC%20response%20to%20BIS130111.pdf (accessed 26 January 2011).
- Grinyer et al, supra n 44, 15. Some of the respondents to the UK Department of Business, Innovation and Skills' consultation document seeking evidence concerning short-termism in the UK were unsure as to what is meant by short-termism: supra n 36, para 42.
- Supra n 48 and referring to J Stiglitz, “Using Ta x Policy to Curb Speculative Short-Term Trading” (1989) 3 Journal of Financial Services Research 101, 106.
- Tonello, supra n 47.
- See S Lydenberg, Corporations and the Public Interest: Guiding the Invisible Hand (Berrett-Koehler, 2005) and quoted in A White, “What is Long-Term Wealth?” Business for Social Responsibility article, September 2007, www.bsr.org/reports/bsr_awhite_long-term-wealth.pdf (accessed 28 December 2010) at 4.
- L Bebchuk and H Spamann, “Regulating Bankers' Pay”, http://ssrn.com/abstract=1410072 (accessed 9 May 2011); S Bhagat and R Romano, “Reforming Executive Compensation: Focusing and Committing to the Long-Term” (2009) 26 Yale Journal on Regulation 359.
- UBS AG, Shareholder Report on UBS's Write-Downs, at 42, and referred to in Rose, supra n 15.
- There are indications that short-termism not only contributed to the GFC but to the financial scandals involving companies like Enron and WorldCom. For example, see P Healy and K Palepu, “The Fall of Enron” (2003) 17 Journal of Economic Perspectives 3, 9–11; Rappaport, supra n 35, 69.
- Supra n 42, para 1.13.
- Rappaport, supra n 35. See also Tonello, supra n 47.
- Rappaport, Ibid, 69.
- Supra n 36, para 53.
- Lipton et al, supra n 20. But some respondents to the consultation paper of the Department of Business, Innovation and Skills in the UK did not see short-termism as necessarily bad for the economy: supra n 36, para 44.
- Grinyer et al, supra n 44, 15; Tonello, supra n 47.
- Supra n 42, para 1.13.
- V Ho, “‘Enlightened Shareholder Value’: Corporate Governance Beyond the Shareholder–Stakeholder Divide” (2010) 36 Journal of Corporation Law 59. See also S Jacoby, “Finance and Labor: Perspectives on Risk, Inequality and Democracy” (2008) 30 Comparative Labor Law and Policy Journal 17, 57–61.
- Aspen Institute, supra n 47.
- Supra n 1.
- Supra n 12, 12.
- Ibid, 13.
- Company Law Review, Modern Company Law for a Competitive Economy: The Strategic Framework (DTI, 1999), para 5.1.10.
- “Institutional Investment in the United Kingdom: A Review” chaired by P Myners, March 2001, http://archive.treasury.gov.uk/pdf/2001/myners_report.pdf (accessed 17 December 2010).
- November 2007, at p 25, www.napf.co.uk/PolicyandResearch/DocumentLibrary/0051_Institutional_investment_in_the_UK_six_years_on_report_and_recommendations_1107.aspx
- Jacoby, supra n 69, 24–25, 57–61. Also, see Aspen Institute, supra n 44.
- Supra n 45, para 4.23.
- Supra n 36, paras 6, 10.
- Ibid, para 57.
- European Commission, “The EU Corporate Governance Framework” Green Paper, COM(2011) 164 at 12. Possible ways to overcome this could be the introduction of restrictions on the length of fund management mandates or the remuneration of fund managers.
- Taylor, supra n 20.
- Supra n 42, paras 1.14 and 4.1.
- Ibid, para 4.23.
- Ibid, para 5.27.
- Rappaport, supra n 35, 66
- Ibid, 66. Some argue that a focus on short-termism amongst shareholders does not exist. For example, see J Nocera, “A Defences of Short-termism”, New York Times 29 July 2009, C1; M Roe, “A Political Theory of Amercian Corporate Finance” (1991) 91 Columbia Law Review 10, 13; G Dent, “The Essential Unity of Shareholders and the Myth of Investor Short-ter-mism” (2010) 35 Delaware Journal of Corporate Law 97.
- J Graham, R Campbell and R Shiva, “The Economic Implications of Corporate Financial Reporting” Working paper (11 January 2004) and referred to by Rappaport, supra n 35, 69.
- Supra n 42, para 1.13.
- Supra n 45, para 4.23.
- Rappaport, supra n 35, 69.
- Ibid.
- Ibid.
- Ibid.
- Tonello, supra n 47; Rappaport, supra n 35, 5. The introduction of the office of chief risk officer in many large banks since the handing down of the Walker Review can be seen as some attempt to address this problem.
- Aspen Institute, supra n 47.
- A Keay, “Enlightened Shareholder Value, the Reform of the Duties of Company Directors and the Corporate Objective” [2006] Lloyds Maritime and Commercial Law Quarterly 335; A Keay, “Tackling the Issue of the Corporate Objective: An Analysis of the United Kingdom's ‘Enlightened Shareholder Value Approach’” (2007) 29 Sydney Law Review 577.
- Company Law Review, supra n 74, para 5.1.1.
- Ibid, para 5.1.12.
- For a discussion of this theory, see, eg, DG Smith, “The Share holder Primacy Norm” (1998) 23 Journal of Corporate Law 277; L Stout, “Bad and Not-So-Bad Arguments for Share holder Primacy” (2002) 75 South California Law Review 1189; J Fisch, “Measuring Efficiency in Corporate Law: The Role of Shareholder Primacy” (2006) 31 Journal of Corporate Law 637; A Keay, “Shareholder Primacy in Corporate Law.Can it Survive? Should it Survive?” (2010) 7 European Company and Financial Law Review 369. It is to be noted that one commentator argues somewhat persuasively that the UK has a more shareholder-centric approach than the US: C Bruner, “Power and Purpose in the ‘Anglo-American’ Corporation” (2010) 50 Virginia Journal of International Law 579.
- Company Law Review, supra n 74, para 2.19
- Supra n 98, para 5.1.12.
- For discussion of this approach, see, eg, RE Freeman, Strategic Management: A Stakeholder Approach (Pitman/Ballinger, 1984); R Karmel, “Implications of the Stakeholder Model” (1993) 61 George Washington Law Review 1156; J Clarke, “The Stakeholder Corporation: A Business Philosophy for the Information Age” (1998) 31 Long Range Planning 182; A Campbell, “Stakeholders: The Case in Favour” (1997) 30 Long Range Planning 446; A Keay, “Stakeholder Theory in Corporate Law: Has it Got What it Takes?” (2010) 9 Richmond Journal of Global Law and Business 249.
- Supra n 98, paras 5.1.25–5.1.28.
- Recently the Walker Review rejected any pluralist notions: supra n 42, Annex 3, 137.
- Modernising Company Law (Cm 5553, 2002, DTI).
- Modernising Company Law (Cm 5553-I, 2002, DTI), para 3.6.
- Cm 6456, 2005, DTI.
- Company Law Reform (DTI, 2005), Explanatory Notes, para B17.
- The Review was provided for in The Companies Act 1985 (Operating and Financial Review and Directors' Report etc) Regulations 2005 (SI 2005/1011).
- A Johnston, “After the OFR: Can UK Shareholder Value Still Be Enlightened?” (2006) 7 European Business Organization Review 817, 818.
- While there are some technical distinctions in the use of the term “member” on the one hand and “shareholder” on the other, this paper will refer to them as being synonymous.
- Supra n 45, para 2.8.
- Ibid, para 3.6.
- Supra n 42, Annex 3, 137.
- Discussed in chapter 5 of the Review. The UK has provided for a Stewardship Code (available at www.frc.org.uk/images/uploaded/documents/UK%20Stewardship%20Code%20July%2020103.pdf, accessed 28 December 2010), since 2 July 2010. From 6 December 2010, the FSA (through FSA Instrument 2010/57 and a change to the FSA Handbook) has provided that asset managers are required to disclose on their websites the nature of their commitment to the Code.
- Supra n 42, para 1.14.
- For example, see C Williams and J Conley, “An Emerging Third Way? The Erosion of the Anglo-American Shareholder Value Construct” (2005) 38 Cornell International Law Journal 493; Ho, supra n 69; D Millon, “Enlightened Shareholder Value, Social Responsibility, and the Redefinition of Corporate Purpose Without Law“, 19, http://articles.ssrn.com/abstract=1625750 (accessed 30 December 2010).
- For example, see Parliamentary Joint Committee on Corporations and Financial Services, Commonwealth of Australia, Corporate Responsibility: Managing Risk and Creating Value (2006), www.aph.gov.au/Senate/committee/corporations_ctte/cor-porate_responsibility/report/report.pdf (accessed 2 September 2007).
- For example, see S Carsley, “A Rudderless Regime: The United Kingdom's ‘Enlightened Shareholder Value’ as a Model for the Duty of Loyalty in Canada” (unpublished LLM thesis, University of Toronto, 2010); P Vasudev, “Stakeholders in the CBCA: An Appraisal and Some Proposals” (2011) (unpublished paper, copy on file with the author).
- For example, see I Esser, “Recognition of Various Stakeholder Interests in Company Management” (unpublished LLD thesis, University of Pretoria 2008).
- For example, see M Jensen, “Value Maximisation, Stakeholder Theory and the Corporate Objective Function” (2001) 14 Journal of Applied Corporate Finance 8; H Hansmann and R Kraakman, “The End of History for Corporate Law” (2001) 89 Georgetown Law Journal 439, 439; G Dent, “Corporate Govern ance: Still Broke, No Fix in Sight” (2006) 31 Journal of Corporate Law 39, 57.
- Lipton et al, supra n 20, refer to the fact that short-termism is still rife. See also Aspen Institute, supra n 47.
- S Wallman, “The Proper Interpretation of Corporate Constituency Statues and Formulation of Director Duties” (1991) 21 Stetson Law Review 163, 176–77; M Lipton and S Rosenblum, “A New System of Corporate Governance: The Quinquen nial Election of Directors” (1991) 58 University of Chicago Law Review 187, 205–15; ME van der Weide, “Against Fiduciary Duties to Corporate Stakeholders” (1996) 21 Delaware Journal of Corporate Law 27, 61.
- See D Millon “Why Is Corporate Management Obsessed with Quarterly Earnings and What Should be Done About It?” (2002) 70 George Washington Law Review 890, 902.
- Supra n 98, para 5.1.17.
- T Hazen, “The Short-Term/Long-Tern Dichotomy and Investment Theory: Implications for Securities Market Regulation and for Corporate Law” (1991) 70 North Carolina Law Review 137, 140.
- For more detailed considerations, see, eg, A Keay, Company Directors' Duties (Jordans, 2009), ch 6; S Mortimore et al, Company Directors (Oxford University Press, 2009).
- HC Standing Committee D, Fifteenth Sitting, 11 July 2006, Cols 591–93.
- Charterbridge Corp Ltd v Lloyds Bank Ltd [1970] Ch 62; Extrasure Travel Insurance Ltd v Scattergood [2003] 1 BCLC 598. See also A Keay, “Good Faith and Directors' Duty to Promote the Success of their Company” (2011) 32 The Company Lawyer 138.
- Law Society's Company Law Committee, June 2005, 6.
- Submission to the Department of Trade and Industry, June 2005, 25.
- Ministerial statements, Companies Act 2006, Duties of Company Directors (DTI, 2007), 7–8, available at www.berr.gov.uk/files/file40139.pdf (accessed 31 October 2010). See also Lord Gold smith, Lords Grand Committee, 6 February 2006, col 255.
- Explanatory Notes to the Companies Act 2006, para 327.
- See Keay, supra n 128, ch 8; Mortimore et al, supra n 128; A Reisberg, Derivative Actions and Corporate Governance (Oxford University Press, 2007); R Hollington, Shareholders' Rights (Sweet & Maxwell, 5th edn, 2007).
- www.investors.rbs.com/download/report/RBS_Annual_Report_and_Accounts_09.pdf (accessed 3 October 2011). Also see the position of the Bank of New York Meillon which slashed its dividend payable in 2009 by 63% (B Steverman, “The Ever-Shrinking Bank Dividend”, Blomberg Businessweek, 21 April 2009, www.businessweek.com/investing/insights/blog/archives/2009/04/the_ever-shrink.html (accessed 7 June 2010).
- www.investors.rbs.com/download/report/RBS_Annual_Report_and_Accounts_09.pdf, 61 (accessed 3 October 2011).
- See the recommendations in supra n 42, ch 7.
- Under B.7.18 of the UK Corporate Governance Code (June 2010 and accessible at www.frc.org.uk/corporate/ukcgcode.cfm (accessed 3 October 2011) it is recommended that all directors of FTSE 350 companies be subject to re-election on an annual basis. Recently, in a speech at the Cass Business School by the FRC's Chief Executive Stephen Haddrill it was acknowledged that this had been a controversial inclu sion (20 September 2011), www.frc.org.uk/searchresults.cfm?GOTO=%2Findex.cfm&GOTOSUB=%2Fcorporate%2Findex.cfm&gSearch=election&SITE=all&Search=Search (accessed 3 October 2011).
- F Allen and D Gale, Comparing Financial Systems (MIT Press, 2000), 382.
- Haldane, supra n 49.
- W Allen, “Our Schizophrenic Conception of the Business Corporation” (1992) 14 Cardozo Law Review 261, 273.
- E Elhauge, “Sacrifi cing Corporate Profi ts in the Public Inter est” (2005) 80 New York University Law Review 733, 756.
- In responses to the consultation paper of the Department of Business, Innovation and Skills, “A Long-Term Focus for Corporate Britain – A Call for Evidence”, www.bis.gov.uk/assets/biscore/business-law/docs/l/10-1225-long-term-focus-corporate-britain.pdf (accessed 17 December 2010) (The consultation was open from 25 October 2010 to 14 January 2011) directors picked up on this point. See supra n 36, para 12.
- Cm 6456, 2005, DTI.
- S Mayson, D French and C Ryan, Company Law (Oxford University Press, 24th edn, 2007), 457.
- Company Law Review, supra n 74, para 2.19. It has been said that directors should be at liberty to use their commercial judgment in order to balance short-and long-term considerations: Australian Parliamentary Joint Committee on Corporations and Financial Services “Corporate Responsibility: Managing Risk and Creating Value,” 21 June 2006, para 3.82, www.aph.gov.au/Senate/committee/corporations_ctte/corporate_responsibil-ity/report/report.pdf (accessed on, 24 December 2010).
- Company Law Review, supra n 74, para 3.54.
- HC Standing Committee D, Fifteenth Sitting, 11 July 2006, Cols 591–593.
- For example, see Millon, supra n 118.
- Although one view put forward by respondents in an empirical study undertaken by Peter Taylor was that the preparation of the Business Review was, in comparison to the OFR, easier: Taylor, supra n 20, 182.
- Johnston, supra n 111, 841.
- S 417(3).
- S 417(5).
- Gower and Davies' Principles of Company Law (Sweet and Maxwell, th edn, 2008), 740.
- Taylor, supra n 20, 196.
- Ibid.
- Supra n 8; D Arsalidou, “The Banking Crisis: Rethinking and Redefining the Accountability of Bank Directors” [2010] Journal of Business Law 284, 292.
- Taylor, supra n 20, 162.
- A Alcock, J Birds and S Gale, Companies Act 2006: The New Law (Jordans, 2007), 146.
- Company Law Review, supra n 74, para 3.58.
- See supra n 98, para 5.1.20 (for instance).
- Supra n 42, Annex 3, 137.
- V Cable, Foreword to “A Long-Term Focus for Corporate Britain – A Call for Evidence” Department of Business, Innovation and Skills (October 2010), 5, www.bis.gov.uk/assets/biscore/business-law/docs/l/10-1225-long-term-focus-cor-porate-britain.pdf (accessed 17 December 2010). The study ran from 25 October 2010 to 14 January 2011.
- Taylor, supra n 20, 200.
- Supra n 36, para 11.
- Ibid, para 10.
- Sahlman, supra n 9.
- Ibid.
- Financial Reporting Council, “UK Stewardship Code” (July 2010), www.frc.org.uk/images/uploaded/documents/UK%20Stewardship%20Code%20July%2020103.pdf (accessed 28 December 2010).
- Through FSA Instrument 2010/57 and a change to the FSA Handbook (COBS 2.2.3R).
- Financial Reporting Council, “UK Corporate Governance Code” (June 2010), www.frc.org.uk/documents/pagemanager/Corporate_Governance/UK%20Corp%20Gov%20Code%20June%202010.pdf (accessed 28 December 2010).
- Financial Reporting Council, “UK Stewardship Code (July 2010), 1.
- Ibid.
- Ibid.
- BR Cheffins, “The Stewardship Code's Achilles' Heel” (2010) 73 Modern Law Review 1004, 1013, 1016.
- Ibid.
- A Sundram, and A Inkpen, “The Corporate Objective Re visited” (2004) 15 Organization Science 350, 352; S Deakin, “The Coming Transformation of Shareholder Value” (2005) 13 Corporate Governance: An International Review 11; Williams and Conley, supra n 118, 501.
Law and Financial Markets Review
Volume 5, 2011 - Issue 6