Chapter 2: Standard Life: A Study of One of the UK’s Oldest Institutional Investors
Christine A. Mallin INTRODUCTION The wave of financial scandals and collapses around the world has highlighted the need for better corporate governance. In the UK, it was after the failures of Coloroll and Polly Peck that the Committee on the Financial Aspects of Corporate Governance was established in May 1991. The Committee published its report in 1992, and it became widely known as the Cadbury Report, after its Chair, Sir Adrian Cadbury. The Report is widely recognized as having set the foundations for a ‘best practice’ system of corporate governance, both in the UK and subsequently in many countries across the world which incorporated some or all of its recommendations into their own corporate governance codes. At its core, the Cadbury Report (1992) recommended that companies should appoint three independent non-executive directors, separate the roles of Chair and CEO, and have an audit committee and a remuneration committee. A nomination committee was identiﬁed as one possible way to ensure a transparent appointments process. There have been numerous reports elaborating on aspects of the Cadbury Report over the last decade or so, including Greenbury (1995), Hampel (1998), the Combined Code (1998), Turnbull (1999), Higgs (2003), Smith (2003), and most recently the revised Combined Code (2003). The various codes generally view institutional investors as having a responsibility to exercise their power and inﬂuence appropriately in the companies in which they invest. The Combined Code (2003) has two main parts: one on companies and one on institutional shareholders. The part on...
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