The fount of all knowledge – effective corporate governance

In January, FSA published CP10/3 on effective corporate governance, which reflects some of the regulator-specific recommendations in last November’s Walker Review. For some time FSA has emphasised governance and the capability of individuals in key governance roles but “in light of recent events, we recognise that our focus on the quality of governance and the intensity of our previous supervisory assessment of it did not adequately reflect its importance.”(Para 1.2, CP10/3). Richard Burger and Andrew Davidson of Reynolds Porter Chamberlain LLP study the proposed correctives.

Richard Burger (+44 (0)20 3060 6429, richard.burger@rpc.co.uk) is a senior associate in the Commercial and Regulatory Group of Reynolds Porter Chamberlain LLP. Andrew Davidson (andrew.davidson@rpc.co.uk) is a trainee solicitor at the firm.

New assessment of effective corporate governance and the role of directors

CP10/3 emphasises how important it is that firms should demonstrate practical operation of effective corporate governance. Firms must not only ensure that they have structures and systems in place for good governance but also be able to evidence that these are entrenched, are adequately applied and stress tested.