A review of corporate governance in UK banks and other financial industry entities (The Walker Report)

This review was commissioned by the Prime Minister in February 2009 to examine board practices at UK banks, and later extended to other financial institutions, in response to the recent financial crisis and perceived imbalance between shareholders' limited liability for institutional debts and the effectively unlimited liability of the taxpayer when obliged to bail them out. 'Serious deficiencies in prudential oversight' were noted, along with 'major governance failures within banks', but still promotion of best practice rather than formal regulation is identified as the best means to ensure ownership of good corporate governance

The review comprises five key themes:

1. that the prevailing unitary board structure and FRC Combined Code remain 'fit for purpose';
2. that deficiencies in board practice are predominantly of behavior rather than organization, and that a process of challenging the executive needs to be embedded, a responsibility laid at the door of non-executive directors;
3. that greater dedicated non-executive directorial focus on risk management is required, supported by a dedicated Chief Risk Officer;
4. that active engagement remains a responsibility of shareholders and, in the case of mutual funds, a commitment to a Stewardship Code; and
5. substantial enhancement is necessary of board level oversight of remuneration of all senior employees (not just board level), to be more closely aligned with medium and long-term risk and performance.

Ilgili Dosyalar

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