Business restrains itself

This box from my recent Fund Strategy cover story on responsible capitalism shows that business is anxious to regulate itself. It is not a straightforward matter of regulation being imposed by an interventionist state.

Strict rules on corporate governance have been institutionalised in Britain through a succession of business-backed reports. This is a selection of some of the main ones.

1992 – Cadbury report. The report committee was set up in May 1991 by the Financial Reporting Council, the London Stock Exchange (LSE) and the accounting profession. Its main focus was on the role of boards and auditing. The chairman, Sir Adrian Cadbury, was for many years the chairman of the confectionary company that bore his family name and a director of the Bank of England.

1995 – Greenbury report. The remit of the report was to examine the remuneration of directors. Its chairman, Sir Richard Greenbury, was the chairman of Marks & Spencer.

1998 – Hampel report. The committee was sponsored by the Confederation of British Industry, the Institute of Directors, the LSE and other organisations. Its remit was to review the impact of the Cadbury and Greenbury initiatives. The chairman of the committee, Sir Ronald Hampel, also chaired ICI at the time.

1999 – Turnbull report. The report focused on internal controls within companies. Its chairman was the finance director of the Rank Organisation.

2003 – Higgs report. Focused on the role of non-executive directors within companies. Its recommendations included the separation of the roles of chief executive and chairman within companies.

2005 – An updated version of the Turnbull report was published.