Numerous reports on governance - aimed particularly at the private sector - have been produced in recent years, most importantly the Combined Code of Governance, first issued in 1998 following a series of corporate collapses and financial scandals in the 1980s. The Code has been reviewed by the Financial Reporting Council (FRC), alongside the Walker Review and in May 2010 the FRC published the new UK Corporate Governance Code, effectively replacing the Combined Code.
The Financial Reporting Council, the London Stock Exchange, and the accountancy profession established the Committee on the Financial Aspects of Corporate Governance in May 1991 (chaired by Sir Adrian Cadbury). A key part of its report was a recommended Code of Best Practice with which the boards of all Stock Exchange listed companies registered in the UK should comply. The Committee hoped that other companies would also adopt the code. The Cadbury Report (Cadbury Sir Adrian, Report of the Committee on the Financial Aspects of Corporate Governance,) was followed by others on related aspects of governance: the Greenbury Report (1995) (Greenbury Sir Richard, Directors’ Remuneration), and the Hampel Report (1998) (Hampel Sir Ronnie, Committee on Corporate Governance: Final Report). The various recommendations contained in these were drawn together by the Financial Reporting Council and published as the Combined Code in 1998.
The original Combined Code was not sufficiently robust, and in 2003 it was updated and reissued taking account of: the Turnbull Report (Turnbull N, Internal Control: Guidance for Directors on the Combined Code, 1999); the Myners Review (Myners Report on Institutional Investment, HM Treasury, London 2001) of institutional investment (2001); the Higgs Review ( Higgs D, Review of the Role and Effectiveness of Non–Executive Directors, 2003) of the role and effectiveness of non–executive directors (2003); the Tyson Review (Tyson L, The Tyson Report on the Recruitment and Development of Non–Executive Directors. A Report commissioned by the DTI, London Business School, 2003) of the recruitment and development of non–executive directors (2003); and the Smith Review (The Smith Report, Audit Committee Combined Code Guidance,) of audit committees 2003).
The Combined Code defines a board's main role in the private sector as being "to provide entrepreneurial leadership of the company within a framework of prudent and effective controls which enables risk to be assessed and managed", and it is interesting to consider the implications of this term for higher education.
Guidance on Board Effectiveness, published by the FRC in March 2011, replaces the Higgs Guidance and covers the role of the Chairman, the Senior Independent Director, other Directors and there is a new section on the role of the Company Secretary in relation to effective governance.
The Walker Report, published in November 2009, contains a number of recommendations about governance in banks and financial institutions, which may have more general applicability.
The European Confederation of Directors' Associations and the Institute of Directors have published Corporate Governance Guidance and Principles for Unlisted Companies in the UK