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A Study on UK Corporate Governance Development
―Based on the Former Japanese Researches―
Contents
Ⅰ. Introduction
Ⅱ. Former Researches on UK Corporate Governance in Japan
Ⅲ. Development of Corporate Governance in UK from Three Points of View
Ⅳ. Conclusion
Ⅰ. Introduction1
Corporate governance now is being discussed all over the world, especially in the developed
countries such as the US, UK and Germany. When the bubble economy burst in 1991 in Japan,
1
In this paper, we use the term “company” mainly, but not “corporation”. Because
“corporation” has a broader meaning including the juridical person such as NPO, communion,
hospital and so on. Since we think corporate governance of the subject to the commercial and
public organizations listed on the stock market, we use the term “company” except for the term
“corporate governance”, “corporate control” and so on.
1
this issue has come to light. Lots of scandals were detected, and furthermore, the effectiveness
of Japanese large public companies fell because of having “three excesses”‐employment,
equipment and debt. The causes of these problems were laid in the companies’ board of
directors that were not functioning effectively under the reciprocal share holdings in company
group called “kigyo-shuudan”, for example, Mitsubishi, Mitsui, Sumitomo. But now, the
reorganization of these groups is rapidly developing, and the reciprocal share holdings apt to
break each other. Therefore the reconstruction of corporate governance is required intensely.
The discussions of corporate governance, however, have a tendency to be confused under the
various companies’ circumstances in Japan. For instance, there are some scholars and
practitioners who treat corporate governance only within company law, and the others who
think this of relationship matters between company and stakeholders and so on. We, hence,
should consider the reasons why these confusions occurred in discussions of corporate
governance. We think that the development of UK corporate governance has some useful
suggestions to this problem and further implications, so, in this paper we aim to reconsider
corporate governance by studying the development in UK where the joint-stock company was
first born, and would like to indicate some implications.
2
The joint-stock company originates in East India Company established by UK in 16002.
Although the present joint-stock company is established by a notice system, at the time it was
only approved by the king’s diploma. Anyway, formed were shareholders’ limited liability,
juridical person rank, and free transfer of shares which are common to the present
characteristics. Though the establishment of joint-stock company was becoming popular after
that, this became being restricted strongly by some illegal transactions of shares symbolized by
South Sea Company’s scandal3. But now, since “1884 year company law”4 in UK went into
operation which eased the establishment of joint-stock company, the main form of companies
all over the world is joint-stock company. However many illegal actives, such as window
dressing, have been generating in the modern company society, and then corporate governance
become being discussed as a triggers. As we think this way, corporate governance was
generating at the same time with the birth of joint-stock company, therefore, we would be able
to regard it as the old but new issue. Seki said, “some companies’ bankruptcies coming from the
function of board and accounting audit was the direct background in UK”(Japan Corporate
2
There is other opinion that has an origin of the joint-stock company in East India Company
established by Holland. In this way, the opinion is divided on the matter(Nakano,2003).
3
Cf. Charkham and Simpson(1999).
4
Since this company low was enacted, joint-stock company could establish by only the notice
(ibid.).
3
Governance Forum ed., 2001). There were a various illegal actions by the companies’
executives or directors in the base like South Sea Company’s scandal.
UK, hence, would be said to be the country where the matter of corporate governance first
occurred. However, the past researches in Japan were taken place mainly for the US, Germany
and Japan, so there are few studies on UK corporate governance. Furthermore, we have the
impression as they think UK corporate governance model of a part of the US one in former
researches only because both are Anglo-Saxon’s countries, and then there are not studies
considering the originality of UK corporate governance.
In this paper, we are based on the definition of corporate governance‐“the system by which
companies are directed and controlled”(Cadbury Committee, 1992). And we think discussions
between shareholders and board of directors as a narrow sense concept, and one considering all
stakeholders as a wide sense concept. As our research approaches, first, we will review some
former researches on UK corporate governance in Japan, and then put it in order pointing out
their problems. Second, we will consider the historical contexts which have the discussions of
corporate governance in UK generated. We would like to arrange its history from the following
three points of view.
a. The development from the theory of “corporate control”. That is a stream resulting in a
narrow sense of corporate governance generally and formed a theoretical base.
4
b. The development from ethical aspect. This became discussed from the consecutive
companies’ scandals, and this is a stream resulting in a wide sense of corporate governance
including all the stakeholders.
c. The development from “privatization” carried out by “Thatcherism”. This brought directors’
remuneration problems because directors of privatized companies took too much
remuneration. Furthermore, the UK Government has the preference shares so called
“Golden Share” at the time, and this also influences the governance of companies.
Based upon the above stream, we will arrange the development of corporate governance in
UK picking up some cases. Finally, we will indicate some implications on the discussions of
corporate governance.
Ⅱ. Former Researches on UK Corporate Governance in Japan
1. Initial Researches
In Japan, the most of studies on UK corporate governance have been taken place since 2000.
There is Inagami’s study(1997) famous before that time. When the concept of corporate
governance itself was permeating comparing with today, he took up corporate governance
5
under the influences of Cadbury Committee in 1992 and Greenbury Committee in 1995. He
first defines business model in UK as “short term management investing human capital
negatively, and there is strong influence of which shareholders apt to exit and are mediate by
the “City””(Inagami, 1997). And then, he is discussing how short term management developed
to corporate governance. Taking mainly lots of articles of “Financial Time”, his approach
summarized above-mentioned committees’ reports, and discussed comprehensively the matter
related to corporate governance, for example, stabilization of shareholders, interlocking
directorship, executives’ social character and so on. But his study did not focus on the point,
furthermore, was not systematic. Anyway, it is certain that Inagami’s study took a narrow
sense of corporate governance discussing the relation between shareholder, board and
executive, and the action of institutional shareholders.
Next, there is Hatta et al.’s study(2000). They introduced Cadbury committee’s report(1992),
Greenbury committee’s report(1995), Hampel committee’s report(1998) to Japan translating
into Japanese. Therefore, their study was inevitably focused on only institutional reformation,
discussing corporate governance in UK from a view of the theory of institution. Although the
main subject ‐the realities of UK companies which business administration should take ‐
failed to notice, corporate governance reformation in UK has got being well known in Japan. As
a result, corporate governance in UK became being paid more attention, and made later
6
researches been taken place actively. There is the meaning of their study here.
2. Researches on Business Ethical and Institutional Aspect
By Hatta et al.’s study, we can see some studies comparatively which consider the context
why each committee was born, and the interpretation and condition of observance on corporate
governance “code” laid down by them. For instance, there are Naito(2000, 2003),
Demise(2003)’s study and so forth. Especially, Naito’s study(2000) has some interesting points.
He notices that the corporate governance reformations in UK were promoted by private groups
including Financial Reporting Council(FRC), London Stock Exchange(LSE), and were based
on code, but not law or regulations. Chairpersons of each committee who draw up the each code
are A.Cadbury(former GCE 5 , Cadbury-Schweppes p.l.c.), R.Greenbury(GCE, Marks and
Spencer p.l.c.), R.Hampel(former GCE, ICI p.l.c.) who are former or present executives. Hence,
he points out that each committee was established as intended to avoid compulsory regulations,
it turned out to be some codes in order to change compulsion from the exterior into self-imposed
control(Naito, 2000). “Common law has taken root in UK, and there is a thought that what
controls companies conducts is not the text of law, but a pile of former customs”(Japan
5
In UK, we do not apt to call top executive as Chief Executive Officer(CEO) generally, but use
the word “GCE”(Group Chief Executive).
7
Government Homepage, 2005). In contrast, the US companies are regulated by forced
regulation represented by The Sarbanes-Oxley Act(SOX) and this is different from UK.
Anyway, common points to their researches are to see corporate governance reformation in
UK from a view of business ethics. They think that it generates for solving business ethical
problems and ensuring justice in companies’ continuation, because consecutive companies’
scandals ‐BCCI, Maxwell scandals and so on ‐ gave many stakeholders significant
influences. In addition to this perspective, their studies are also based on the theory of
institution which focuses institutional reformation on UK corporate governance.
3. Researches Taking Note of Actions of Institutional Shareholders
Hampel committee was prescribing the shareholders’ actions code(substantially
institutional shareholders). As a result, the roles and responsibilities which institutional
shareholders accomplish became gathering more attention for good corporate governance. As
was stimulated by the development like this, in Japan some studies on relation between
institutional shareholders and corporate governance became taken place comparatively6.
These studies consider mainly institutional shareholders’ desire, ability, limitation for
corporate governance, and there was a context that their presence in LSE rose much higher.
6
Cf. Kawauchi(2001), Suto(2003), Ueda(2001) and so on.
8
Their common cognitions were the following. “The institutional shareholders in UK have a lot
of shares in individual companies. Therefore, where they have got lost confidence to invested
companies, they cannot sell their shares without influencing share price. As a result, they could
not help voicing by doing governance action.”(Ueda, 2001) For that reason, they expect the role
of institutional shareholders to corporate governance. They also point out that governance
actions by institutional shareholders have some limitations on the other hand. If a certain
institutional shareholder raised company’s performance by intervening governance of the
company with bearing many costs, it would generates “free ride problem” which another
investors who did not bear any costs take benefits by the action above. Again, there is a
possibility which “agency problem” generates between fund managers whose valuations are
decided by short term and some pension funds who hope long term investment. Hence, though
the raised presence of institutional shareholders in the market made them perform their roles
larger, these studies assert the capacity limitations of institutional shareholders.
To compared with researches asserting that the role of institutional shareholders is merely
restrictive, Sakamoto(2003) alleges that corporate governance by them is highly excellence.
Because he thinks that governance under institutional shareholders did not only improve
performance of companies, but also has much justice in Government’s employment policy. As
9
for performance improvement, he researched 4 largest banks in UK ‐ RBS, HSBC, Barclays,
Lloyds TSB ‐ , and argued that shareholder oriented governance constructed high
performance constitution because of promoting restructuring to the companies. And then, as
executives or directors who could not achieve good performance stopped them from their
positions, it contributes to clearing the responsibility. On the other hand, although many
unemployed people generate as a result of such restructuring and a tax is used for their
employment countermeasures, he thinks there is a justice about this. Because the resources
used for this are paid by people who take ultimate benefits from institutional shareholders’
actions in UK.
4. Problem Points of Former Researches in Japan
We reviewed the main former researches on UK corporate governance in Japan above. That
can roughly order as following. First, Inagami initially studied in the middle of 1990s under the
influence of Cadbury committee’s report. Second, after a series of corporate governance
reformation came to an end by Hampel committee’s report, corporate governance code was
introduced by Hatta et al. After that, we can see some researches that interpret the code,
consider the shareholders activism and so forth. And then, we can order former researches into
two main streams. The one is an approach from business ethical and institutional aspect
10
paying attention to companies’ scandals and so on, and the other is shareholders activism
approach considering relation between companies and institutional shareholders. Again, we
can summarize the problems of former researches on UK corporate governance in Japan as
following.
a. The former researches in Japan considered the developments without having systematic
context. Each study focused only narrow and individual points, furthermore, did not discuss
the theoretical context.
b. Although we can see the indications to too much directors’ remuneration, we can not see the
studies considering the factors‐cultural one, function of remuneration committee and so
on.
c. Although we can think that Golden Share which is a system peculiar to UK influences
corporate governance so much, we can not see the researches about this.
d. We can not see the case study on industrial company such as British Petroleum
p.l.c.(henceforth ‘BP’). Although former researches discussed general remarks on UK
corporate governance, almost nothing are the researches that try to generalize from
industrial level or case study on individual company.
We could indicate the problems of former researches on UK corporate governance in Japan.
As we indicated above, in this paper we would like to focus on “a” and “c” especially, because we
11
can not have the space to explain it fully. The next section is discussing the context of the
development of corporate governance in UK.
Ⅲ. Development of Corporate Governance in UK from Three Points of View
1. Development from the Theory of Corporate Control – Theoretical Aspect –
Since “Modern Corporation and Private Property”(1932) was published by A.Berle and G.Means
in the US, the studies on “corporate control” which considers relation between ownership and
control in joint-stock company became doing enthusiastically. They researched the owned
shares about the US 200 largest industrial companies in 1929 at first, and then indicated that
the characteristics of shareholders changed from the constitution of a small number but large
scale shareholders to large number but small scale one. These shareholders have only interests
in income from their shares, but not have the will to intervene the companies. Therefore,
A.Berle et al. thought that in modern company the shares of companies changed from “active
property” including the control rights of companies into “passive property” not including them,
and then they presented the concept of “separation of ownership and control”( Berle and Means,
1932). Corporate control by management which they pointed out was supported by
12
R.Larner(1970), E.Herman(1981) and so on, and was established as the theory of
“management control” later.
Corporate control starting at the US was discussed vigorously in UK by Berle’s influence
after World War Ⅱ. There are some researches‐Parkinson’s “Ownership of Industry”(1951),
Florence’s “Ownership, Control and Success of Large Companies･･･”(1961), supporting management
control because of the dispersion of share holdings. In opposition to these, Aaronovitch’s “The
Ruling Class : A Study of British Finance Capital”(1961) supported “ownership control” because the
boards of companies were still controlled under the capitalists. Although some disputes on
corporate control in UK were taken place above, the researches on it in UK were sporadic and
did not indicate a certain direction as compared to the US and Japan where discussed it
systematically(Nakama, 1991). Whichever the researchers supported management control or
ownership control, they held fast to analysis on individual companies. And then, they were said
not to bring any new points of view into the theory of corporate control.
Based upon interlocking directorship and institutionalization of share ownership in addition
to analysis on individual companies, J.Scott was drawing many attentions by bringing network
analysis into corporate control. His concept was “control through a constellation of
interest”(Scott, 1979). This was “the study which considered the whole structure of ownership
and control, and took the relation between a ruler and a ruled company from a view of mutual
13
control or dependence, but not one-sided rule or subordination”(Masaki ed., 1991). He thought
that traditional management control became commonplace in UK after the World War Ⅱ, and
then its meaning has got lost under the condition in which institutionalization of shareholders
developed.
The point we would like to emphasis by using Scott’s argument is that sufficient analyses
did not take place by the past framework of corporate control that chose between the two
concepts. Because the control of joint-stock company shifted from a step of rule by ownership to
by management, and to the age of institutionalization 7 of ownership that concentrated
dispersed shareholdings on the institutional shareholders such as unit trust, pension fund. And
we think that this Scott’s concept would form a base to develop from corporate control to
corporate governance. Institutional shareholders, hence, became having considerable influence
to the companies by using “voice” and “exit”. They, however, can not make use of control power
as compared with the age of ownership control. Companies’ executives or directors also can not
control the company as compared with the times when the shareholdings highly dispersed.
This is “control through a constellation of interest”. We think new power balance occurred
7
The ownership rate on institutional shareholders in UK share market was nothing but about
25% in 1963, but rose by about 70% in 2001(Japan Government Homepage, 2006).
This growth rate is higher than the US and Japan.
14
between institutional shareholders and top management of companies has made us generate
“governance”, but not “rule” or “control”8.
2. System Reformation Caused from Business Ethical Problems9
After Cadbury committee’s report in 1992, corporate governance has become to take a great
concern in UK. This committee made a start to deal with companies’ scandals caused by BCCI
p.l.c. and Maxwell p.l.c., and was a private group as mentioned above. Maxwell scandal was
detected by R.Maxwell’s sudden death in 1991 who was a chairman of the company, and it
included that mainly diverted ￡440 million of its pension funds unlawfully, and then went
bankrupt while bearing a debt of about ￡1.7 billion. BCCI was so called “criminal bank”
which committed many criminal acts like international money laundering, corruption, and so
forth. As a result, it was disbanded by England Bank. As these scandals gave great impacts for
many stakeholders, checking mechanisms to the companies have become coming into notice.
Accordingly, intended to the prevention of scandals like this, the committee discussed about a.
8
Sakuma ed.(1998) also asserts the thought similar to us. His assertion has a little problem
because he thinks corporate governance of the issue only between shareholders and companies’
executives and directors. We have to consider all the stakeholders including shareholders in
discussing corporate governance.
9
We summarized this simply, because there has already been many researches in Japan.
15
guarantee of institutional shareholders’ interests, b. effective function of board of directors and
auditor to illegal acts, c. improvement from now on(Inagami, 1997). Then it laid down the
corporate governance code called “code of best practice” which should observe as guiding
principle. In 1995, Greenbury committee was called which took the term “Directors’
Remuneration”. This committee was organized by gathering criticism to directors’
remuneration becoming higher as mentioned above, and we will discuss in detail as following.
Finally, Hampel committee announced “Committee on Corporate Governance, Final Report”,
and then this committee advised LSE to unify three committee’s codes and principles being
based on former two committees’ reports. LSE drew up “Combined Code” and adopted it on the
rules to list the market. A series of corporate governance reformations in UK ended
generally(Japan Corporate Governance Forum ed., 2001).
A series of system reformations occurred as a result of the problems such as consecutive
scandals, directors’ high remuneration and business ethics.
3. Directors’ Remuneration Problem and Golden Share Caused by Privatization
UK was the country where became starting point of “industrial revolution” and
accomplished technological innovation represented by a steam engine. It formed the base on
16
the manufacturing industry so called “world factory” later. But the competitiveness of UK
industry declined slowly by the rise of the US and Germany as industrial nation since the end
of 19th century, furthermore, the rapid growth of Japan and “NIES(Newly Industrializing
Economies)” countries after the World War Ⅱ spurred the tendency10. This condition appears
clearly in Table 1 indicating the change of share on each country in the world export market.
This problem had public opinion uplifted in 1960‐1970s. As a result, it promoted the birth
of Thatcher’s administrative. Thatcherism’s basic target was the reindustrialization of UK
economy, and one of the main policies was said to be “privatization”(Inagami, 1997). At the
same time, this privatization left some problems for UK corporate governance however.
10
A.D.Chandler thinks that the reason why UK lost its competitiveness existed in
“organizational capability”. Many companies in both the US and Germany executed
investments in production, sales and organization what is called “three pronged investment”
and built up “first mover advantage” by monopolization. He said, almost all the UK companies
did not executed the investment like this actively by contrast(Chandler1990).
17
Table 1: The Change of Share on Each Country in The World Export Market
％
35
30
25
UK
US
GER
JPN
FRANCE
OTHER
20
15
10
5
0
1950
1960
1979
1970
1992
Reference : Inagami(1997), “Financial Times” March 20-21 1993.
(1)Golden Share and Case on BP
The first one which privatization left is Golden Share, and it defined as following. “Being
only one share, it has much more privileges than other shares, and is held by the Government
in principle”(Nomura, 1991). Although this was produced in the process of privatization, we can
see the Government’s intention that tries to execute its influential power to the privatized
companies. The main rights of Golden Share are the following(ibid.), and Table 2 shows the
regulations related to restrictions of shareholdings to privatized companies by the UK
Government below.
a. Restriction of shareholdings by specific individuals.
18
b. Restriction related to disposal of company assets.
c. Restriction related to spontaneously company close or disorganization.
d. Restriction related to issue of common shares.
e. Conditions of directors’ appointment.
Now, how would privatization and Golden Share in UK relates to corporate governance? We
can see the case on BP. It took the investment from the UK Government in 1914. When the
World WarⅠbroke out, W.Churchill invested 2 million dollars in BP to secure stable energy
supply, which was equivalent to two-thirds of all BP shares. The relation between the
Government and BP originates in this context. Hence, it was nationalized by the Government.
BP now is a complete private company by Thatcher’s privatization after that BP offered its
shares for public subscription, and the Government sold parts of their shares in 1922, 1967 and
so forth(Chandler, 1990). The relation between BP and the UK Governance was formed
spending a long time like this, and still this is being maintained. The remarked cases are the
following.
First, there is the case between BP and Britoil. Britoil was a national oil company
established under the Labor Party’s administrative in 1976 and privatized by Thatcherism.
Though Britoil accepted the acquisition by US company‐ARCO, BP commenced hostile
takeover to Britoil in October 1987. Britoil decided to sell all its shares to BP after all. Because
19
the UK Government declared the execution of Golden Share in December 1987, ARCO avoided
that this authority executed(Nomura, 1991). Therefore, the Government had intention to make
BP buy Britoil and could achieve it by the influential power of Golden Share. Next, there is the
case that Kuwait Investment Office(KIO) made a corner on BP shares in 1988. It became clear
that KIO had 21.7% of BP shares after the year when the UK Government sold their shares.
Although KIO asserted a friendly long term investment(Fraser. ed., 1988), the Government felt
threat and ordered that KIO sold BP shares. KIO sold BP shares and its shareholding declined
by 9.9% in 198911. Where BP was acquired by KIO, the UK Government’s intention which
made BP take Britoil shares had no significance. Therefore, the Government is said to have
had intention not to want to permit KIO’s share obtaining, if possible(ibid.).
The cases above show that the Government has commitment to the privatized companies.
That symbol is Golden Share, and we can see that the UK Government influenced company’s
policy decisions through it from the relation between BP, Britoil and KIO.
11
KIO’s proportion to BP shares declined by 3.23% as of December 31 2003(BP p.l.c., 2004).
20
Table 2 : General Restriction of Shareholdings
General Restriction
Company : The Government
Restriction of Shareholding
Appointment
Sold Its Shares
Vote Rights
All Issued
Foreigners’
BP
of Director
2 people
British Aerospace
15%
Cable & Wireless
1 person
15%
Amersham International
15%
British Telecom
15%
British Gas
15%
2 people
British Airways
15%
BAA
15%
British Steel
15%
25%
Reference : Nomura, 1991,pp..34-37
(2)Directors’ Remuneration Problem and Case on BP
Privatization also have generated directors’ remuneration problem in privatized companies.
21
This was picked up as “fat cat” problem, and had Greenbury Committee called as a result. This
committee has especially called for disclosure of remuneration system and appropriate
application. Therefore, privatization in UK also has relation to corporate governance from a
view of directors’ remuneration. Table 3 shows executive directors’ remuneration on BP in 2002
and 200412.
The remarkable characteristics of remuneration system in BP are to allow executive
directors to their own company’s shares in addition to annual remuneration and share option,
and then they are BP’s shareholders necessarily. This exists not only in BP, but also in all the
main companies in UK, such as Cadbury Schweppes, ICI. Of course, although we should not
judge only from the case on BP, we can see how directors’ remuneration, especially GCE, is too
high from Table 3. Lord Brown who is GCE of BP took currency remuneration ￡3,774,000 and
352,750 shares of his company except for share option in 2004. As a result, he took more than
￡5 million(currency remuneration and share allowance) in 200413, and have assets more than
￡8 million as the shares of his company.
12
In UK we call director who executes the operation in the company as “executive director”,
and one who does not execute the operation as “non-executive director”(NED) by contrast.
13
BP’s average share price was ￡4.13 in 2004(BP, 2004).
22
Table 3 : Executive Directors’ Remuneration on BP
Shares
Annual Remuneration
Long Term Performance Remuneration
Owned
Share allowance
Share option
by Director
2002
2004
2002
2004
2002
2004
2004
Lord Brown
£3,031
£3,774
224,000
352,750
1,348,032
1,500,000
2,031,279
Allen, D.
-
£1,036
-
62,518
220,000
275,000
408,342
Conn, I.
-
£542
-
-
-
-
119,098
Grote, B.
£1,871
£2,103
68,000
131,750
349,038
349,998
888,213
Hayward, A.
-
£1,061
-
54,825
220,000
275,000
206,084
Manzoni, J.
-
£1,071
-
51,170
220,000
275,000
196,336
*Monetary Unit : ￡1,000 Reference : BP(2002, 2004) “Annual Report and Accounts”
Although BP has achieved great performance thanks to great rise of oil price recently14, we
think his remuneration is too higher compared with other companies. For example, J.Veer who
is GCE of the former Royal Dutch Petroleum Company N.V. took only €2.5 million as currency
14
Net income of BP in 2004 was ＄16,200 million(ibid.).
23
remuneration despite achieving higher performance than BP(Royal Dutch Petroleum
Company, 2004). Furthermore, CEOs of average energy companies in the US took merely
average currency remuneration‐＄1.15 million(Inabetsu,2002). We could see how directors’
remuneration is high in privatized companies in UK, though it was led from only the case on
BP. We think that it is necessary to consider that the remuneration committee in BP functions
properly, and further, we need to examine other UK companies.
Ⅳ. Conclusion
This paper considered the context of UK corporate governance systematically making
allowance for the former researches in Japan. Speaking from the theoretical aspect at first, we
indicated that the intensified presence of institutional shareholders made framework shifted
from “rule” or “control” to “governance” as a result. Next we presented that a system
reformation was generated from business ethical aspect by consecutive companies’ scandals in
early 1990s. Finally, we exhibited that privatization by Thatcherism has resulted in directors’
remuneration problem and Golden Share as a historical context considering some cases on BP.
Therefore, the development of corporate governance in UK has three significant contexts. This
24
is a conclusion of this paper. As the former researches did not consider corporate governance in
UK systematically, we think this paper has the originality in this point and could reconsider
corporate governance in UK.
We could also take following two implications.
a. Corporate governance has become being discussed based on a variety of the contexts, but not
one. The discussions on corporate governance are argued on different planes sometimes,
because each researcher would not consider various contexts of corporate governance as one
of the reasons. We could take an implication like this by studying UK corporate governance.
b. UK and US are both Anglo-Saxon’s countries, and then corporate governance styles of both
countries have been regard as the same almost all in the past studies. Of course, there are
some common features such as shareholder oriented governance, but we can see many
characteristics peculiar to UK and different from the US. For example, share allowance to
executive directors, governance rule by the code but not the regulation and so forth.
Furthermore, we can see the term “GCE” and “NED” in UK, instead of the term “CEO” and
“outside director”. We can also confirm the difference between UK corporate governance and
the US in this point. If we think corporate governance of one of the “institution”, there ought
to be own characteristics in each country. No matter how same people “Anglo-Saxon” are apt
to dominate both in UK and the US, corporate governance styles cannot help changing if
25
counties are different.
Finally, in this paper, we considered only the case on BP to draw out some implications
about UK corporate governance, and then, the answers from it cannot help being restrictive. In
addition, we could not have the considerations about interlocking directorship deeply. We,
hence, need to study these subjects considering the case on ICI and Cadbury Schweppes and so
on. We would like to study being based on these points from now on.
【References】
Aaronovitch, S.(1961), “The Ruling Class : A Study of British Finance Capital”, Lawrence. London.
Berle, A.A. and Means, G.C.(1932), “The Modern Corporation and Private Property”, Macmillan.
New York.
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