The Law on Corporate Governance in Banks

The Law on Corporate Governance in Banks

Elgar Financial Law and Practice series

Iris H.-Y. Chiu, Michael McKee, Anna P. Donovan, Rod Edmunds, Andreas Kokkinis Kokkinis, John Lowry, Marc T. Moore and Arad Reisberg

Corporate governance in financial institutions has come under the spotlight since the banking crisis in the UK in 2008-9. In many respects, the banking business raises unique problems for corporate governance that are not found in other corporate sectors. The Law on Corporate Governance in Banks is the first work to provide a detailed survey and practical examination of key topical issues in the corporate governance of banks and financial institutions, including governance structure, collective board responsibility, directors’ liability, shareholders, and risk management. Combining the insight and expertise of leading corporate lawyers in the field with rigorous academic analysis, the book unpicks and clarifies the legal issues that confront corporate and banking law practitioners when advising banks and financial institutions.


Anna P. Donovan

Subjects: law - academic, finance and banking law, law -professional, finance and banking law


A critical challenge facing banks (and those responsible for their governance) is the implementation of effective anti-bribery and corruption (ABC) systems and controls. Regulatory developments and, in particular, the Bribery Act 2010 (the Bribery Act or the Act) have renewed interest in (and scrutiny of ) a firm’s internal governance as a key component of its ABC initiatives. An organisation’s internal systems and controls are, of course, a central tenet of its’ ABC response (particularly in light of the Act’s requirement that a firm implement adequate procedures to prevent bribery being committed on its behalf ). However, these internal procedures are just one aspect of a board’s ABC responsibility; regulation and industry guidance make it clear that boards are also required to develop and instil a culture of compliance within the bank. Drawing on the Bribery Act as the key driver of recent governance attention, this chapter considers the impact of the Act on a board’s responsibility to implement both adequate internal procedures and a broader ethical culture within the bank’s governance framework. Banks and other financial institutions occupy an interesting position regarding the Act and the governance response that it demands. They are, of course, already subject to complex risk-management, compliance and wider financial crime obligations and sanctions.

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