The Legal Control of Directors' Conflicts of Interest in the United Kingdom: Non-Executive Directors Following the Higgs Report
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Richard C. Nolan
This paper makes the case for using the independent non-executive directors of a company listed in the United Kingdom exclusively as monitors and regulators of management, particularly as regulators of executive directors’ conflicts of interest, rather than as participants in management who also have a control function. It is suggested that these proposals can be accommodated within current (and anticipated) corporate law in the United Kingdom, that they are practicable, and that they are desirable. The proposals are made against the background of a continued strong emphasis in the United Kingdom on non-executive directors’ dual role both as managers of a company’s business and as monitors of its executive directors. It is suggested that this dual role for non-executive directors tends significantly to undermine the effectiveness of their control function, and that consequently the dual role should be abandoned in favor of the more focused role proposed in the paper. Improving the effectiveness of non-executive directors as regulators of executive directors’ conflicts of interest is vitally important to corporate governance in the United Kingdom: as the paper explains, other legal methods of controlling those conflicts in the United Kingdom suffer from serious deficiencies.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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- Conflicts of Interest in Publicly-Traded and Closely-Held Corporations: A Comparative and Economic Analysis
- Conflicts of Interest in Japanese Insolvencies: The Problem of Bank Rescues
- The Problem of Bank Rescues: A Comment on Miwa and Ramseyer
- Images of Organizations and Consequences of Regulation
- Images of Organizations and Interfirm Externalities: A Comment on Rubin
- The Legal Control of Directors' Conflicts of Interest in the United Kingdom: Non-Executive Directors Following the Higgs Report
- Organizational Loyalties and Models of Firms: Governance Design and Standard of Duties
Artikel in diesem Heft
- Article
- Conflicts of Interest in Publicly-Traded and Closely-Held Corporations: A Comparative and Economic Analysis
- Conflicts of Interest in Japanese Insolvencies: The Problem of Bank Rescues
- The Problem of Bank Rescues: A Comment on Miwa and Ramseyer
- Images of Organizations and Consequences of Regulation
- Images of Organizations and Interfirm Externalities: A Comment on Rubin
- The Legal Control of Directors' Conflicts of Interest in the United Kingdom: Non-Executive Directors Following the Higgs Report
- Organizational Loyalties and Models of Firms: Governance Design and Standard of Duties
