This chapter assesses how regulation addresses sub-optimal internal organisation and governance at banks in order to change behaviour. The Basel Committee defines the role of internal control at banks to be for three purposes: to assist in achieving profitability and performance, to ensure the reliability and integrity of financial information relating to the bank, and to assist in external compliance with regulations. Meanwhile, corporate governance may be defined as ‘a system by which companies are directed or controlled’. As a framework for determining exercise of power, decision-making, and accountability, corporate governance is important in the shaping of an overall organisational culture. The chapter also considers the regulation of bankersʼ remuneration. Although such regulation affects bankers individually, there are aspects of ‘collective’ policy in remuneration regulation that seek to control organisational freedom in giving rewards, as well as aspects that affect individual incentives.
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Chapter
Iris Chiu and Joanna Wilson
Chapter
This chapter considers provisions of the Companies Act 2006 (CA 2006), Pt 10, Ch 4, and Ch 4A. These provisions regulate transactions with directors where there is an acute conflict of interest between the director’s personal interests and his duty to the company and so, typically, the statute requires prior shareholder approval of the transaction. The relevant provisions address: directors’ service contracts (CA 2006, ss 188–189); payments for loss of office (CA 2006, ss 215–221); for quoted companies (which must have a directors’ remuneration policy)—remuneration payments and payments for loss of office (Ch 4A); substantial property transactions (CA 2006, ss 190–196); and loans and similar financial transactions (CA 2006, ss 197–214).
Chapter
This chapter examines the duties and powers of trustees. It considers how trustees can be appointed to and removed from office. It explains that trustees have a wide variety of powers but misuse of these powers will constitute a breach of trust. It also highlights the fact that, while trustees have the primary rights of ownership in trust property, they are not able to exploit the beneficial incidents of this ownership for themselves in their capacity as trustees, since they hold the property for other people or sometimes for particular purposes. This chapter also discusses the essence of trusteeship, the different types of trustees, and payment to trustees.
Chapter
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter focuses on the relationships created by agency, namely, the rights and liabilities of the agent, the principal, and the third party. It first explains disclosed agency as opposed to undisclosed agency with regard to the contract made by the agent, and then, after discussing the rights and liabilities of the principal and the third party, considers the rights of the agent against their principal, including remuneration, indemnity, and lien. The chapter examines the agent’s two kinds of duty to their principal (contractual duty and fiduciary duty) and discusses remedies for breach of fiduciary duty and how an agency may be terminated as well as the effects of termination. It concludes by highlighting the provisions of the Commercial Agents (Council Directive) Regulations 1993.
Chapter
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter focuses on the relationships created by agency, namely, the rights and liabilities of the agent, the principal, and the third party. It first explains disclosed agency as opposed to undisclosed agency with regard to the contract made by the agent, and then, after discussing the rights and liabilities of the principal and the third party, considers the rights of the agent against his principal, including remuneration, indemnity, and lien. The chapter examines the agent’s two kinds of duty to his principal (contractual duty and fiduciary duty) and discusses remedies for breach of fiduciary duty and how an agency may be terminated, as well as the effects of termination. It concludes by highlighting the provisions of the Commercial Agents (Council Directive) Regulations 1993.
Chapter
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the UK corporate governance system and some of the key corporate governance topics. It begins by looking at what corporate governance is and how the UK’s corporate governance system has evolved. The chapter then discusses the effectiveness of the ‘comply or explain’ approach. It also discusses a number of key corporate governance mechanisms, namely institutional investors, non-executive directors, and directors’ remuneration.
Chapter
The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter explores important issues in company management and corporate governance, starting by examining the role of directors and shareholders (and the relationship between them) and the separation of ‘ownership and control’. Since the early 1990s, the governance of listed companies has been dominated by self-regulatory codes (currently the UK Corporate Governance Code). This chapter examines how these codes operate and considers key themes in corporate governance, including the role of non-executive directors and auditors; the position of institutional investors; and executive remuneration.
Chapter
This chapter addresses the process by which directors are appointed and remunerated, the various board structures, and the importance of board diversity. All companies are required to appoint a director, with the Companies Act 2006 (CA 2006) providing that a private company must have at least one director, and a public company at least two directors. Every public company must also appoint a company secretary. Before a person is appointed as a director, that person and the company will usually negotiate to determine the new director's remuneration package. Remuneration practices tend to differ markedly depending on company size. The two most common board structures in the world are the unitary board and the two-tier board. Meanwhile, in recent years, board diversity has become a major governance topic. The focus to date has been on increasing gender diversity in the boardroom, but recent attention has also focused on ethnic diversity.
Chapter
D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner
This chapter focuses on the rights and obligations of the principal and the agent between themselves, whether arising from a contract between them or from the fiduciary nature of their relationship. However, those rights and obligations may also derive from other sources, for example tort, statute, or the law of restitution. There is detailed consideration of the duties of the agent, such as the duty of care and skill and fiduciary duties, as well as the rights relating to remuneration, reimbursement and indemnity, and lien. The chapter also discusses the ways by which agency may be terminated.
Chapter
This chapter addresses the process by which directors are appointed and remunerated, the various board structures, and the importance of board diversity. All companies are required to appoint a director, with the Companies Act 2006 (CA 2006) providing that a private company must have at least one director, and a public company at least two directors. Every public company must also appoint a company secretary. Before a person is appointed as a director, that person and the company will usually negotiate to determine the new director’s remuneration package. Remuneration practices tend to differ markedly, depending on company size. The two most common board structures in the world are the unitary board and the two-tier board. Meanwhile, in recent years, board diversity has become a major governance topic. The focus to date has been on increasing gender diversity in the boardroom, but recent attention has also focused on ethnic diversity.
Chapter
This chapter examines the European Union (EU) law concerning the right to receive services under Article 56 of the Treaty on the Functioning of the European Union (TFEU). The chapter considers the dividing line between those services which are provided for remuneration and publicly funded services—these include education (including scholarships and grants) and healthcare (including in the context of the Patients’ Directive). It focuses on the jurisprudence of the Court of Justice (CJ) in which it has developed a number of mechanisms to extend rights for those who have moved to receive services.
Chapter
This chapter discusses the UK corporate governance system and some of the key corporate governance topics. It begins by looking at what corporate governance is and how the UK’s corporate governance system has evolved. The chapter then discusses the effectiveness of the ‘comply or explain’ approach. It also discusses a number of key corporate governance mechanisms, namely institutional investors, non-executive directors, and directors’ remuneration.
Chapter
This chapter examines the duties and powers of trustees. It considers how trustees can be appointed to and removed from office. It explains that trustees have a wide variety of powers but misuse of these powers will constitute a breach of trust. It also highlights the fact that, while trustees have the primary rights of ownership in trust property, they are not able to exploit the beneficial incidents of this ownership for themselves in their capacity as trustees, since they hold the property for other people or sometimes for particular purposes. This chapter also discusses the essence of trusteeship, the different types of trustees, and remuneration of trustees.
Chapter
Ross Cranston, Emilios Avgouleas, Kristin van Zweiten, Theodor van Sante, and Christoper Hare
This chapter discusses bank structural reform. Most structural reform initiatives that have been undertaken since 2008 were aimed at reversing the effects of the repeal of the Glass–Steagall Act in the late 1990s and of the EU legislation that promoted universal banking. The chapter first considers the financial stability concerns and the mechanics of contemporary structural reform legislation in the USA, the UK, and the EU, and the actual legal framework underpinning these reforms. It then covers the regulation of bank involvement in derivatives markets. Today, derivatives regulation is a clear part of macroprudential regulation to the extent that centralized clearing and settlement and increased transparency battle opacity and interconnectedness and limit systemic risk. The remainder of the chapter covers deposit insurance, bank corporate governance, risk control, and executive remuneration.
Chapter
The fiduciary duty is the defining duty of trusteeship and consists of several overlapping obligations intended to promote loyalty or faithfulness. As part of his fiduciary duty, the trustee should avoid conflict with the interests of the trust and not to make an unauthorised unauthorized profit from the trust property, or from his position of trust. The fiduciary duty may also apply to a person who is not a trustee, in which case he is said to be a fiduciary. This chapter examines the principal obligations of trusteeship and the implications of breach of those obligations for trustees, beneficiaries, and third parties. It first discusses the strict rule of exemplary fiduciary propriety before turning to the duty of good faith. The chapter also looks at fiduciary relationships and fiduciary duties, the fiduciary duty to avoid conflicts of interest, the fiduciary duty to account for unauthorised unauthorized profits, and trustee remuneration.
Chapter
This chapter analyses the way in which company law shapes two important markets—the market for executives and the market for corporate control—in the hope of addressing the agency problems identified in Chapter 1. Both sets of rules are controversial. The rules on executive pay make use of independent directors on remuneration committees and various forms of ‘say on pay’ to structure executive remuneration. But they have been criticised for not robustly linking pay to performance and for setting pay at socially unacceptable levels. The rules on the market for corporate control, set out mainly in the Takeover Code, contain a very strong version of the non-frustration rule, making it difficult for incumbent managers to defend themselves against unwelcome bidders. Here, it is heavily debated whether the rule promotes managerial efficiency or encourages ‘short termism’.
Chapter
L. Bently, B. Sherman, D. Gangjee, and P. Johnson
This chapter is concerned with the restrictions placed on the copyright owners’ ability to exploit and use their work. It first considers the various mechanisms that are used to regulate contracts between authors and entrepreneurs and then assesses the impact of competition law on the ability of copyright owners to exploit their works. It also looks at the ways in which copyright contracts are regulated with respect to users of copyright, along with the issue of orphan works. The chapter concludes by outlining the different controls that are imposed on collecting societies.
Chapter
This chapter explores the role of directors in corporate governance. Rules on appointment and removal of a company’s directors are considered, followed by public disclosure of the names of directors and their work as a board, their remuneration and their powers of management. The chapter also considers the legal categorisation of directors, whether as fiduciaries, agents or trustees; the relationship between directors and shareholders of public companies; transparency; and general legal principles regarding the board of directors. Relevant legislation such as the Companies Act 2006 and the UK Corporate Governance Code, as well as particularly significant court cases, are mentioned.
Chapter
This chapter discusses the scope of corporate governance as a means of mitigating the ‘agency problems’ arising from centralised management. It covers: the Financial Reporting Council and the UK Corporate Governance Code and Stewardship Code for listed companies; narrative reporting forms; the role of the company secretary; directors’ service contracts; the remuneration of directors; and statutory reforms to deal with directors’ remuneration.
Chapter
L. Bently, B. Sherman, D. Gangjee, and P. Johnson
This chapter is concerned with the restrictions placed on the copyright owners’ ability to exploit and use their work. It first considers the various mechanisms that are used to regulate contracts between authors and entrepreneurs and then assesses the impact of competition law in the UK and Europe on the ability of copyright owners to exploit their works. It also looks at the ways in which copyright contracts are regulated with respect to users of copyright, along with the issue of orphan works. The chapter concludes by outlining the different controls that are imposed on collecting societies.
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