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NCJRS Abstract

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NCJ Number: 160760 Find in a Library
Title: Corporate Governance (From The Regulation and Prevention of Economic Crime Internationally, P 199-206, 1995, Jonathan Reuvid, ed. -- See NCJ-160747)
Author(s): M E Jones
Date Published: 1995
Page Count: 8
Sponsoring Agency: Kogan Page Ltd
London, N1 9JN, England
Sale Source: Kogan Page Ltd
120 Pentonville Road
London, N1 9JN,
United Kingdom
Type: Guideline
Language: English
Country: United Kingdom
Annotation: This chapter presents the background and text of the United Kingdom's Code of Best Practice for corporate governance, which is designed to counter and prevent corporate crime.
Abstract: Economic crimes stem largely from weaknesses in corporate governance, or the way in which a business is managed and controlled. These weaknesses include a dominant chief executive with unfettered powers who has difficulty distinguishing between personal assets and those of the company; insufficient checks and balances over the executive directors; lack of a clear role for the board of directors and for non-executive directors; inadequate control over the levels of executive remuneration; and insufficient disclosure of what is actually happening to the business. In the United Kingdom, a growing crisis of confidence in business, particularly the way it was managed and audited, grew in the wake of a recession in the late 1980's and early 1990's. In response to this crisis, a number of bodies, including the Stock Exchange, the Law Society, and the accountant profession, with the support of the government, established a committee to review the financial aspects of corporate governance. Created in May 1991, the committee began by seeking the view of anyone who was interested in corporate governance. A draft report was issued for comment, and in December 1992, after the committee considered that a consensus had been reached, the Report of the Committee on the Financial Aspects of Corporate Governance (the Cadbury Report) was published. The report was essentially a brief code. Listed and unlisted securities market companies incorporated in the United Kingdom were, for part or whole periods ending after June 30, 1993, required to make a statement in their report and accounts about their compliance with the code and identify and provide reasons for any areas of noncompliance. These statements were also required to be reviewed by auditors to the extent that they could be objectively verified. In addition, a publication of statement of compliance, reviewed by the auditors, was made a continuation obligation of listing by the London Stock Exchange. The code presents standards for the board of directors, non-executive directors, executive directors, and reporting and control. In addition, "notes" provide further recommendations on good practice; they do not constitute part of the code. A survey of the 100 largest companies conducted between January 1 and May 31, 1994, revealed that all the companies surveyed included a statement of compliance with the code.
Main Term(s): Criminology
Index Term(s): Corporate crimes; Crime specific countermeasures; Foreign crime prevention; White collar crime
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