Business leaders are calling for an overhaul of the country’s approach to corporate governance.
In a new report out today, the Institute of Directors (IoD) said that the UK has “learned little” since the financial crisis, relying on checklists “aimed at creating the cardboard cut-out perfect company” rather than addressing pressing governance problems head-on. Ken Olisa, who chaired the advisory panel that worked on the IoD report, said it was wrong to rely on regulators to improve governance.
“Identifying symptoms of governance failures, and then drawing up check lists to eradicate them leaves us in the position of always fighting the last battle,” Olisa said, adding, “The financial crisis was not caused by a lack of rules, it was caused by behaviour which was clearly egregious to any outside observer.”
“Unfortunately the UK seems to have learned little since the crisis, sticking to a prescriptive set of attributes aimed at creating the cardboard cut-out perfect company,” he said, adding that report calls for a new governance framework because “no one factor dictates whether a company is well-run.”
“It is simply not correct for a company to say that because they have ticked certain boxes, they show good governance,” Olisa said.