I recently made a submission to the corporate governance inquiry being conducted by the Business, Innovation and Skills Committee of the House of Commons. The terms of reference include directors’ duties, executive pay and the composition of boards and my submission addressed the question:
“Should Government regulate or rely on guidance and professional bodies to ensure that Directors fulfil their duties effectively?”
In my submission (which you can read here or on the inquiry’s website here), I recommend the adoption of a public enforcement model for directors’ duties based on the Australian scheme under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth).
As I explain in my submission, there is already a quasi-public enforcement model in the United Kingdom that sits alongside the private enforcement model. However, I advocate the expansion of public enforcement in order to make up for the problems with the private enforcement model (which relies on action by or on behalf of the company).
EDIT (5 November 2016): The written submissions to the inquiry have been published. Of those that I’ve read, Professor Andrew Keay has also argued in favour of a public enforcement model for similar reasons to those that I advanced in my submission.
Ryan J. Turner 