In the UK, a special report on corporate governance was recently released by Sir David Walker, the person appointed by the British Venture Capital Association in 2007 to undertake an independent review of that country’s private equity industry and produce a code of conduct for the industry. In the report, Walker recommends extensive reforms to strengthen that country’s bank governance and increased disclosure on pay. Specifically, the Walker report recommends “strengthening the role of non-executives and giving them new responsibilities to monitor risk and remuneration.” Also, the report recommends that the chairman of the board of a company faces annual reelection.
Sir Walker believes that fundamental changes are needed “to make the boardroom a more challenging environment than it has often been in the past. This requires non-executives able to devote sufficient time to the role in order to assess risk and ask tough questions about strategy.”
Clearly, American companies should closely read this report and consider implementing its recommendations.
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