Corporate Governance Structures in Focus

Introduction

The overarching purpose of corporate governance is to create mechanisms within which fair dealings within and by the company can be conducted. Corporate governance is relates to building of structures for decision-making and rules that achieve the alignment of interests of the shareholders and the managers of the company. If there is a weaker corporate governance structures in the company, there is a likelihood of weak investor protection and lenient regulatory mechanisms. Corporate governance also concerns organisational structure and how the company responds to the rights of company stakeholders as well as ensure responsibilities of the stakeholders. Within this organisational structure, executives respect stakeholders’ interests and generation of the company’s wealth is done in a responsible manner.

In this introductory chapter, this dissertation will provide the background of the research with an emphasis on the significance of corporate governance.

Research Methodology

The research question that this research seeks to answer is whether the approach to corporate governance in the UK is adequate to achieve the aims of corporate governance?

The research methodology will be informed by qualitative research method. A desk based research will be conducted for this purpose. Also, this research will use the doctrinal legal research method to identify and analyse legal issues and provisions related to corporate governance in the corporate law. This research will use both primary and secondary sources for the desk based literature review. Thus, legislations and case law (as primary sources) and books, journals and commentaries (as secondary sources), will be used in the research.

Literature Review

This section will provide the literature review. This will be the principal chapter in this dissertation, where the literature on corporate governance will be collated and analysed by the researcher. For the greater part, this section will be descriptive and will synthesise the current scientific literature on corporate governance in the UK.

In the UK, common law and statutory law drive the regulatory mechanism for corporate governance, with the principal legislation being the Companies Act 2006. Corporate governance in the UK has been stressed on by the Hampel Report, as a way for ensuring that public companies remain responsible organisations in the society. As part of this corporate governance, companies need to ensure that they publish trading results, audit statements, and information on operations and governance. Recently, there is also a move to make it compulsory for companies to disclose remuneration of directors.

Findings

The findings of the literature review will be reported in this section. This section will be critical and analytical in nature, and will link the literature to the research questions in a critical manner.