How Far Does the United Kingdom Have a Market-Based System of Corporate Governance? A Review and Evaluation of Recent Developments in the United Kingdom

Abstract

This article questions the extent to which UK corporate governance fits the stereotypical market model. It is argued that the UK system displays features that sit uneasily with an emphasis on markets as the primary form of governance. A web of social relationships between investors and managers complements and to some extent substitutes for marketbased discipline. Thus the United Kingdom possesses characteristics of relationship or network systems as well as those of market systems. Furthermore, it is argued that, contrary to the usual inferences from an apparently dispersed structure of ownership in the United Kingdom, investors are able to exert strong control of managers. This arises from a similarity of interests between investors, and involves some explicit forms of investor co-ordination. The article concludes with some observations on the utility of the two-systems model.

Internal Auditing and Consulting Practice: A Comparison between UK/Ireland and Italy

“…The UK/Ireland and Italy are two European countries differing somewhat on a number of features: law (Consiglio Nazionale dei Dottori commercialisti et al, 2006); corporate governance regimes (Melis, 2000;Hopt & Levens, 2004;Pendleton, 2005); recent corporate governance reforms (Enriques & Volpin, 2007); and age of each nation's professional internal audit: hence, as part of the endeavour to explore this area, we aim in this article to provide an empirical descriptive comparison of the nature, extent and consequences of the definitional change on internal audit consulting activities undertaken by a sample of IIA members in the UK/Ireland and Italy.…”

Convergent and divergent trajectories of corporate governance

“…In the past two decades, the journal has carried some excellent papers on corporate governance (e.g. Aglietta, 2008; Lane, 2003; Maisenbacher, 2018; Pendleton, 2005; Rahim, 2012; Vliegenthart and Horn, 2007). We hope that this Special Issue will stimulate further research and help cement the journal’s reputation as an interdisciplinary outlet for critical perspectives on the causes and consequences of institutional change with respect to globalization, financialization, corporate governance and broader conceptualizations of capitalist relations.…”

Internalities and the Foundations of Corporate Governance

“…Corporate governance also consists of both the formal mechanisms and the informal regulatory conversations that take place in answer to that special status. The regulatory force of corporate governance is as much 'relational' as it is in any sense 'legal' (on corporate governance as a relational device, see Pendleton, 2005; see also Pendleton and Gospel, 2005). The UK's Corporate Governance Code, as we shall see, actually enshrines the uncertain, conventional and disputed character of corporate governance in the running of certain kinds of firm, primarily those characterised by the 'separation of ownership and control', to coin the phrase of Berle and Means (1932).…”

“…This occurs in the context of an understanding of the company as being a relational as well as a market institution (see Pendleton, 2005). Corporate governance has emerged as a mutual, relational, enterprise, through which conflict between different powers are formalised and developed.…”