The figures in this chapter indicate that the recommendations of the Cadbury Committee have had a significant impact on the governance structure of large listed corporations in the UK. The level of compliance with the recommendations of Cadbury and Hampel indicates that corporate boards have adjusted their structure and composition to new corporate governance standards. Although governance structures differ between corporations, the figures suggest a development towards more homogeneity in the composition and structure of corporate boards in large corporations in the UK. Non-executive directors take over positions from executive directors while the average size of corporate boards remains stable. More corporations are assigning non-executive directors to the chairman seat of the board. Also audit, remuneration and nomination committees with a majority of non-executive directors have become increasingly popular in the UK. As such, changes in the structure and the composition of corporate boards suggest a tendency of one-tier boards to transform towards a more independent board structure that formally separates decision management from decision control in the UK. Developments in the governance structure of boards of directors are summarized in box 7.3.
Current Trends in Corporate Governance in the UK
Existing corporate governance framework:
Boards in listed corporations are undergoing changes:
Sources: Spencer Stuart (1996g); ICMG (1995); Chapter 7.
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