Responsibilities of boards
11 Tufton Street
The financial crisis demonstrated that boards of directors were unable to effectively hold management teams to account. Financial controls and risk management systems in many instances were weak and unacceptable implying that the duty to exercise independent judgement may have been compromised. But to what extent is this failure down to the composition of boards, the structure of corporate governance institutions, or underlying company law that prioritises shareholders?
Banking failures occurred in both shareholder and stakeholder oriented economies, in economies with single-tier board structures such as the UK as well as countries such as Germany with two-tier structures. Regulations (CRD IV) have now been introduced with the aim that boards should reflect a broad range of experiences and possess sufficient collective knowledge to understand risks.
An expert panel will debate to what extent the ongoing lack of diversity of boards including employee representatives is contributing to group think and an increased risk of future company failures. Whether the structure of corporate governance institutions is at fault and if further changes need to be made the Companies Act.
This event forms part of a new project on corporate governance and progressive capitalism led by Policy Network.
The work is kindly sponsored by the British Private Equity & Venture Capital Association (BVCA).
Simon Clark, managing partner, Fidelity Growth Partners, Europe
Leslie Dighton, founder and director, The Chairman’s Club
Dina Medland, independent writer, editor and commentator on corporate leadership and governance
Frances O’Grady, general secretary, TUC