An investigation into the fund management industry and a commitment to excluding non-executive directors from new criminal liability rules are at the heart of the IoD’s Governance Manifesto.
Launched today (Tuesday, March 3rd) as part of the IoD’s GE2015 series of policy papers,Priorities for Corporate Governance sets out the IoD’s principles and key policy recommendations. The policies are designed to promote long-termism, value creation, diverse boards and an entrepreneurial corporate culture.
Dr Roger Barker, Director of Corporate Governance at the IoD, says:
"Effective corporate governance is one of the founding principles of the Institute of Directors. In a fast evolving world it is impossible for the regulatory system alone, no matter how sophisticated and well-meaning, to guarantee the sort of corporate behaviour we would all like to prevail. The IoD is of the view that good corporate behaviour and good corporate citizenship are ultimately determined by the right culture, attitudes and expertise amongst board members.
“Shifting the boardroom appointments process away from "the usual candidates" and towards those who can better manage emerging opportunities and risks - particularly in areas like digital technology - should be a key business priority after the next election. This will necessitate more open and transparent approaches to recruitment, including greater disclosure of appointments processes for directors and, where possible, public advertising of available positions."
The IoD’s policy proposals include:
- Encouraging the government to work with market regulators to conduct a further review into the fund management industry as soon as possible, in order to create a more transparent and governance-oriented share ownership system. This should include measures to require fund managers to declare how they vote.
- Promoting director training on a significant scale in order to improve corporate governance and boardroom diversity without the need for excessive and costly regulation.
- Supporting the government to work with the Prudential Regulation Authority and the Financial Conduct Authority to remove non-executive directors from the scope of the financial sector’s new criminal liability regime.
Dr Roger Barker concludes:
“The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company. I believe following the principles and proposals we have released today will bring about just such an environment.”
The full paper, Priorities for Corporate Governance, can be downloaded HERE.