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ICAEW calls for a shake-up of the UK corporate governance system

  • ICAEW (Institute of Chartered Accountants in England and Wales) (lt green) Image

12 Nov 2014

The Institute of Chartered Accountants in England and Wales (ICAEW) has published 'Who should be covered by codes?'. This publication calls for an overarching framework for company behaviour to be developed, expanding the corporate governance debate away from its current focus on boards to address wider concerns about company culture.

'Who should be covered by codes?' is the fifth and last paper in the ICAEW's corporate governance thought leadership series.  It concludes that the current cornerstone of the UK corporate governance regime, the UK Corporate Governance Code, is too narrow and prescriptive to deal effectively with all of the factors that affect business behaviour. In response to this, the ICAEW proposes that an overarching framework for business behaviour should be developed, setting out broad principles by which the companies of today can be guided. This framework can then be supplemented by more detailed codes, such as the UK Corporate Governance Code and Stewardship Code, which are designed specifically for particular groups.

Michael Izza, ICAEW chief executive, said:

"Codes are typically more effective than prescriptive rules in dealing with human behaviour so this approach has the potential to change business behaviour without creating new legislation. A framework could help promote consistency between group specific codes, encouraging a shared sense of accountability and would also allow us to maintain key benefits of a code-based regime, such as innovation and long-term learning.”

The press release and the paper itself can be downloaded from the ICAEW website.

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