Government welcomes publication of Walker review
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Issued July 2009
The Government strongly welcomes Sir David Walker’s proposals for the reform
of the corporate governance of UK banks and other financial institutions.
Lord Myners, the Financial Services Secretary to the Treasury said:
“Corporate governance failures were a major contributor to the financial
crisis. The responsibility for the actions that led the global financial sector
to the brink of collapse ultimately rests with the people who sat around the
bank board tables and those who approved their appointment.
“The weaknesses in board practice, risk management, control of remuneration
and exercise of ownership rights identified by the Review must be addressed.
“Board members in future must ask tougher questions of their chief
executives. They need to spend far more time fulfilling their responsibilities.
Shareholders must ensure that directors have the skills necessary for the tasks
required.
“Sir David has put forward detailed and comprehensive proposals, setting a
new benchmark for best practice both nationally and internationally.
“The consultation process now needs to look not just at the proposals, but
also how to implement and, if necessary, take them further, including their
applicability to non-financial sector firms.
“International adoption of similar measures would also reinforce corporate
governance and contribute significantly to financial stability. Therefore, the
Government will take steps to ensure that proposals to improve corporate
governance are considered internationally.”
Notes
1. The Walker Review of Corporate Governance of UK Banking Industry was
announced on 9 February 2009 by the Chancellor of the Exchequer, the Secretary
of State for Secretary of State for Business, Innovation & Skills, and the
Financial Services Secretary to the Treasury.
2. The Terms of Reference for the review were to examine corporate governance
in the UK banking industry and make recommendations, including in the following
areas:
- the effectiveness of risk management at board level, including the
incentives in remuneration policy to manage risk effectively;
- the balance of skills, experience and independence required on the boards
of UK banking institutions;
- the effectiveness of board practices and the performance of audit, risk,
remuneration and nomination committees;
- the role of institutional shareholders in engaging effectively with
companies and monitoring of boards; and
- whether the UK approach is consistent with international practice and how
national and international best practice can be promulgated.
3. On 21 April, the Terms of Reference were extended so that the Review
should also identify where its recommendations are applicable to other financial
institutions.
4. The review consultation document is published on 16 July. The
consultation period will run until 1 October 2009 and the final report will be
published in November 2009.
5. Sir David Walker is a Senior Advisor to Morgan Stanley. He is a former
Executive Director of the Bank of England, former Chairman of the Securities and
Investments Board and a former Chairman of Morgan Stanley International. In 2008
he chaired in independent industry working group which drew up a voluntary code
to improve levels of disclosure in the private equity industry and its
communication with stakeholders.
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Article Published/Sorted/Amended on Scopulus 2009-07-17 12:20:14 in Economic Articles
