The corporate governance ofUKis highly developed and well organized since it is updated each year to meet the challenges of the new era. Maintaining high standards with low costs is the ulterior motive of the corporate governance code ofUK. Research has proved thatUK’s code has outperformed that of other countries. Compliance costs are comparatively lower than other countries and the standards are higher and much better. TheUKis equipped to face the changing dynamics of today’s world (Cadbury, Sir Adrian, 1996).
The UK is flexible since if an organization deems it necessary to have an approach contrary to that of the governance code of UK then based on an appropriate reason and a legitimate claim the code gives such a company the freedom adopt a different approach. The major aspect of the code is the relationship between the shareholders and the company. Shareholders have voting rights and the board members are encouraged to coordinate with the shareholders. Free trade and a good corporate governance are the major objectives of developing such a developed corporate governance code in UK. The major aspects of theUKcode are having a single board that is responsible for the success of the company. Checks and balances play an important role in the UK code since accountability ensures fair and responsible decision making from the board. The directors have to objective in their decision making and overall transparency in operations is essential. Shareholders have premium rights and extensive consultation in all matters is deemed most important. Therefore, the UK code aims to develop the organization and imposing competitive pressures to prepare the company in the face of the new challenges. The motive of the UK code is to develop and ensure extreme growth of organizations under the code (Financial Reporting Council, 2006).
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