As part of my research for a seminar in which I was involved during the summer, I asked the owners of about 40 small and medium sized companies, as well as a couple of private multinational trading groups and smaller quoted companies, how much they knew about corporate governance and more particularly directors' duties, as set out in the Companies Act 2006.

In an article the other day in the Evening Standard Anthony Hilton made some extremely interesting comments on governance in the light of the proposed acquisition by the Pru of the business of AIG in Asia. Other commentators have suggested that ultimately the Pru could dispose of its UK businesses entirely, and even go as far as moving its primary listing, perhaps to Hong Kong. There are so many issues raised by this potential deal, but here are a couple which relate to corporate governance.

A  headline in the FT  last week  stated  "Michael Geoghegan, Chief Executive of HSBC has threatened to resign from his job if he is not elevated to the Chairman's role, according to people familiar with the bank's succession planning."   We are now finding out a little more of the power playing by members the Board of one of our largest companies.

About a year ago I wrote a short paper entitled "Problems with the law-how much is too much"?  In brief, I asked four questions which, depending on how readers took them, were either too simplistic, too complicated, or indeed both.  What they turned out to be were wholly relevant in the light of the financial and business crisis, which culminated after the Lehman collapse and which, despite what many say, continues and will continue for years to come.  I thought I should put together a short follow up note one year on from the original.

Nick Gould discusses the issues around the 'Companies Act 2006'.

 

'(...) it seems to me the difficulties involved in understanding much of the legislation may well not be of overall benefit to small (and not so small) businesses.  Do they have the time, the skill sets, or the resources to deal with the mass of complexities of the Act and the dozens of accompanying statutory instruments. Most are still not aware of the benefits, such as they are, which the Act attempts to introduce:  many are simply too busy trying to survive, particularly at the moment'.