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A double whammy for the cosy club

Paul Hodgson | May 16, 2017

As if we needed reminding that things are different on either side of the Atlantic, two recent corporate governance events—one in the United States and one in the United Kingdom—demonstrate this starkly.

In the United Kingdom, the Business, Energy and Strategy (BEIS) Committee has recommended that the U.K. Corporate Governance Code be rewritten so that the Financial Reporting Council (FRC) can take enforcement action against non-executive directors. In contrast, the U.S. House Financial Services Committee has just passed the Financial CHOICE Act, also known as the “Death of Dodd-Frank,” which seeks to claw back the enforcement activities of the SEC.

The BEIS Committee is recommending that the FRC be given additional enforcement powers, because currently, as its report says, the laws under the Companies Act 2006 Section 172 are: “not realistically enforceable by shareholders in the courts, even if they were minded to take action against their own company directors.”... To get the full story, subscribe now.