Thinking Outside the Box - Eliminating the Perniciousness of Box-Ticking in the New Corporate Governance Code
Modern Law Review
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Reddy, B. V. (2019). Thinking Outside the Box - Eliminating the Perniciousness of Box-Ticking in the New Corporate Governance Code. Modern Law Review, 82 (4), 692-726. https://doi.org/10.1111/1468-2230.12415
On 16 July 2018, a new corporate governance code was published. As with previous iterations, it applies on a ‘comply-or-explain’ basis, whereby companies are required to either comply with provisions or explain reasons for non-compliance. However, the new code substantially simplified the previous version of the code in an attempt to attenuate the process of ‘box-ticking’. Box-ticking manifests itself in two ways: firstly, by companies complying with the letter rather than the spirit of the provisions, and, second, by companies not utilising the inherent flexibility to implement the optimum firm-specific governance structures by explaining rather than complying. This article will elucidate the history of box-ticking, and the reasons why companies succumb thereto, since Adrian Cadbury pioneered the concept of ‘comply-or-explain’ in 1992, before proposing a new exclusively principles-driven approach to corporate governance which would alleviate box-ticking and fulfill the original aspirations of Cadbury over a quarter of a century ago.
Compliance, Box-Ticking, Corporate Governance Code, Listing Rules, Comply or Explain
External DOI: https://doi.org/10.1111/1468-2230.12415
This record's URL: https://www.repository.cam.ac.uk/handle/1810/288582