"Markets have shown not to be rational; excesses have not been corrected by market discipline".Peston draws the lesson that markets won't stop management making stupid decisions. He doubts that the FSA would be able to stem the tide of irrational exuberance on its own and concludes that only expert non-executive directors would be up to the job.
Does Labour just not care?
5 hours ago
2 comments:
Your readers might find it more helpful to read what Hector Sants said, rather than Peston's comment on it:
http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2009/0312_hs.shtml
If NEDS are the answer, why has nothing apparently changed since Cadbury placed their role centre stage? And where are these "experts" to come from? Grant Thornton's latest survey reports that nearly 80% of FTSE 350 companies have a majority of NEDs on their boards but this is because board sizes have reduced, not because more NEDs have been recruited.
http://www.grant-thornton.co.uk/pdf/Corporate-Governance-Review-2008.pdf
Thank you for the link.
Other research suggests that more independent directors have been appointed in addition to board sizes reducing.
Board size is one of the few corporate governance variables that shows any association with company performance. Some writers have found an optimum board size of 7 - 9 directors and the average FTSE 350 boards has now come down to about that size.
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