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Corporate Governance Changes in UK Companies Between 1988 and 1993

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  • Martin J. Conyon

Abstract

In the UK, recently, there has been an intense debate about what constitutes good corporate governance. This paper presents the results of a retrospective postal survey into the nature of corporate governance structures in UK companies. The objective of this paper is to isolate the extent to which key corporate governance innovations are being adopted in the boardrooms of UK companies. The main findings can be summarised as follows: (i) 77 per cent of the sample of quoted companies separated the role of chief executive officer and chairman in 1993 compared to 57 per cent in 1988; (ii) 94 per cent of quoted companies operated remuneration committees in 1993 as compared to 54 per cent in 1988; (iii) the incidence of audit committees among companies has doubled between 1988 and 1993 whilst the incidence of nomination committees has trebled; (iv) in apparent contradiction of the Institutional Shareholders’ Committee recommendation, of those companies that operated remuneration committees in 1993, 40 per cent had the top executive director as a committee member. Overall the picture that emerges is of radical change in governance innovation since the late 1980s.

Suggested Citation

  • Martin J. Conyon, 1994. "Corporate Governance Changes in UK Companies Between 1988 and 1993," Corporate Governance: An International Review, Wiley Blackwell, vol. 2(2), pages 87-100, April.
    • Handle: RePEc:bla:corgov:v:2:y:1994:i:2:p:87-100
    DOI: 10.1111/j.1467-8683.1994.tb00060.x
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    2. Conyon, Martin J & Leech, Dennis, 1994. "Top Pay, Company Performance and Corporate Governance," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(3), pages 229-247, August.
    3. Sir Adrian Cadbury, 1993. "Thoughts on Corporate Governance," Corporate Governance: An International Review, Wiley Blackwell, vol. 1(1), pages 5-10, January.
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    Cited by:

    1. Noel O'Sullivan, 2000. "The Determinants of Non-Executive Representation on the Boards of Large UK Companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 4(4), pages 283-297, December.
    2. Calcagno, R. & Renneboog, L.D.R., 2004. "Capital Structure and Managerial Compensation : The Effects of Renumeration Seniority," Discussion Paper 2004-120, Tilburg University, Center for Economic Research.
    3. Firth, M. & Tam, M. & Tang, M., 1999. "The determinants of top management pay," Omega, Elsevier, vol. 27(6), pages 617-635, December.
    4. Hristos Doucouliagos & Janto Haman & T.D. Stanley, 2012. "Pay for Performance and Corporate Governance Reform," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(3), pages 670-703, July.
    5. Andrew Benito & Martin Conyon, 1999. "The Governance of Directors' Pay: Evidence from UK Companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 3(2), pages 117-136, June.
    6. Paul Westhead, 1999. "Factors Associated with the Employment of Non-Executive Directors by Unquoted Companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 3(1), pages 81-111, March.
    7. Short, Helen & Keasey, Kevin, 1999. "Managerial ownership and the performance of firms: Evidence from the UK," Journal of Corporate Finance, Elsevier, vol. 5(1), pages 79-101, March.
    8. Vicente Cuñat & Maria Guadalupe, 2005. "How Does Product Market Competition Shape Incentive Contracts?," Journal of the European Economic Association, MIT Press, vol. 3(5), pages 1058-1082, September.
    9. Niamh Brennan & Michael McDermott, 2004. "Alternative Perspectives on Independence of Directors," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(3), pages 325-336, July.
    10. Renneboog, L.D.R. & Trojanowski, G., 2002. "The Managerial Labor Market and the Governance Role of Shareholder Control Structures in the UK," Discussion Paper 2002-68, Tilburg University, Center for Economic Research.
    11. Zhang, Yongshen & Zhang, Qing & Yu, Xiaoliang & Ma, Qiushu, 2023. "Equity overvaluation, insider trading activity, and M&A premium: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).
    12. Charlie Weir & David Laing, 2000. "The Performance-Governance Relationship: The Effects of Cadbury Compliance on UK Quoted Companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 4(4), pages 265-281, December.
    13. Renneboog, L.D.R. & Trojanowski, G., 2002. "The Managerial Labor Market and the Governance Role of Shareholder Control Structures in the UK," Discussion Paper 2002-68, Tilburg University, Center for Economic Research.
    14. John Roberts & Paul Sanderson & David Seidl & Antonije Krivokapic, 2020. "The UK Corporate Governance Code Principle of ‘Comply or Explain’: Understanding Code Compliance as ‘Subjection’," Abacus, Accounting Foundation, University of Sydney, vol. 56(4), pages 602-626, December.
    15. Niamh Brennan & Jacqueline McCafferty, 1997. "Corporate Governance Practices in Irish Companies," Open Access publications 10197/2930, Research Repository, University College Dublin.
    16. Jill Johnes & Swati Virmani, 2020. "Chief executive pay in UK higher education: the role of university performance," Annals of Operations Research, Springer, vol. 288(2), pages 547-576, May.
    17. McKnight, Phillip J. & Weir, Charlie, 2009. "Agency costs, corporate governance mechanisms and ownership structure in large UK publicly quoted companies: A panel data analysis," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 139-158, May.
    18. Dedman, Elisabeth, 2016. "CEO succession in the UK: An analysis of the effect of censuring the CEO-to-chair move in the Combined Code on Corporate Governance 2003," The British Accounting Review, Elsevier, vol. 48(3), pages 359-378.
    19. Diacon, Stephen R. & O'Sullivan, Noel, 1995. "Does corporate governance influence performance? Some evidence from U.K. insurance companies," International Review of Law and Economics, Elsevier, vol. 15(4), pages 405-424, December.

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