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1、Four short words sum up what has lifted most successful individuals above the crowd: a little bit more.-author-dateCorporate-governance(1)Corporate-governance(1)Corporate governance AF4S14 Student name: FENGYUAN TAIN Student number: 11071486Tutor: Rebecca Bushell Content1Introduction32Corporate Gove
2、rnance52.1What is corporate governance52.2Types of corporate governance models and the codes53Barclays corporate governance73.1Board of directors83.2Corporate governance84Audit committee115Conclusion11Reference121 Introduction The report is written for the Corporate Governance first assessment. This
3、 assessment require us chose a company to evaluate how the company applies the expectations and requirements of corporate governance. Moreover, we will review of the composition of the board of directors, compliance with recommended practice, audit report and any other aspects relevant should consid
4、er. We will discuss Corporate Governance from four parts based on case study; totally, there are six parts of the report. First part is the introduction, which will introduce this reports structure, aim or objective. Further, will introduce the chosen company and the reason why chose it. The second
5、part is writ about what is the Corporate Governance, will given some explain and why this is very important for a company. In the following part will discuss different types of corporate governance models, introduce UKs corporate governance model. Also we will evaluate the target company, analysis t
6、heir corporate governance model and advantage and disadvantage of the model. How the company applies the expectations and requirement of corporate governance also will include in this part. The fourth part will discuss the UK corporate governance code and the main principles of the code. In the fift
7、h part, we will analysis the companys board of directors. This part has the follow several points: the role of the board of directors; composition of the broad of directors; for these director or high level management the company prefer use people which have experience or the background suit for the
8、 position; does these choose of staff suit their corporate governance policy. The next part is about the role of the audit committee, how audit committee work though corporate governance. Last part is the conclusion; we will overview this report and give some advice or possible solutions. Target Com
9、pany For this report, we chose Barclays as the target company. Barclays PLC is a British commercial banking and financial services company. Now Barclays headquartered in London, United Kingdom. It is a worldwide bank, their business are include retail, wholesale and investment banking; wealth manage
10、ment, mortgage lending and credit cards. For Barclays they own more than 48 million customer around about 50 countries in the world. At the end of 2011, the company holds US dollar 2.42 trillion assets, in totally and is the seventh largest bank in the world. Barclays business are operated by three
11、main aspects: corporate and investment banking, wealth and investment management and retail and business banking. Barclays was established in 1690 which origins to a goldsmith banking business in London. In 1690, John Freame and Thomas Gould start trading as goldsmith bankers in Lombard Street, in t
12、he city of London this is the predecessor of Barclays. In 1736, James Barclay, John Freames son-in-low, becomes a partner in the business. In 1896, 19 other private banking business which include Backhouses Bank and Gurneys Bank, to form Barclays and Co and over the following several decade developi
13、ng Barclays become a multinational bank. The history of Barclays is more than 300 years; the growth of Barclays is also the history of the UK. For this company they had make lots of UK or worlds first. In 1966, Barclays is launched the UKs first credit card; the next year Barclays unveils the worlds
14、 first ATM, offering Barclaycash from its branch in Enfield, London and it is one of the first financial institutions to advertise its products in the UK. Five years later, in 1972, Barclaycard is the first UK credit card to advertise on TV. At the beginning of the 1980s, Barclays is the firs foreig
15、n bank to file with the Securities and Exchange Commission in Washington DC, USA and become the first UK bank to re-introduce opening on Saturdays. The last decade in last century, Barclaycard is the first UK brand to sponsor a non-fiction TV programme, travel show Wish You Were Here and opens the U
16、Ks first drive-through ATM, near Heathrow Airport. Throughout Barclays history, it is a traditional UKs company and it is representatively. That is why we chose this company as the object of the case study to evaluate their corporate governance. Also will analysis their corporate governance model an
17、d how they achieve these expectations and requirements. 2 Corporate Governance 2.1 What is corporate governance Corporate Governance means a process of a company operate and manage under a set of system, principles with some internal rules of regulations. They provide the methods about how to balanc
18、e or management the relationship between a companys management, its board, their shareholders and other stakeholders. Corporate Governance also set the guidelines, which make sure their corrected direction and can be controlled. Moreover, its help company achieve their objectives and goals to bring
19、more value to company and benefit for all the stakeholders in the long term. In another hand corporate governance play a role of supervisor to monitoring companys performance and process (Lisa, 2009). Summary the corporate governance, if management is about how running the company, corporate governa
20、nce is about make sure the company is run properly. In this case, corporate governance is not only focus on the shareholder that who owns the company, but also response for other stakeholders. The stakeholder means anybody or group that has an interest in the organization; they do not have to have a
21、 direct involvement with the company, such as the board of director, management, shareholders, employees and society. Corporate Governance is very important for a company, because they help maximizing shareholders returns and keeping business risk at a reasonable level. To show whether directors are
22、 not becoming too dominant and receiving reasonable remuneration. For the whole company good corporate governance can effective prevent scandals and fraud in the internal, and find the potential civil and criminal liability of the organization. These are good for companys reputation and image; and m
23、ake it attractive investors, suppliers, customers and other stakeholders. 2.2 Types of corporate governance models and the codes For the corporate governance there three main models or systems. They are one-tier model, two-tier model and ordinary model. The ordinary system is typical of the Italian
24、tradition, this system require the company presence of an administrative and a control body. The administrative body are under a solo director or board of directors whose number of members is determined by the shareholders meeting, unless set in the bylaws; the control body is the board of statutory
25、 auditors. In this case study we fused on the first two models, we will analysis these two systems advantages and disadvantages. One-tier system is typical of the English-speaking country tradition. The management of the one-tier consist a single board with the number of directors and the members co
26、ntrol committee. The single tier board is also called Anglo-saxon model, under this system the executive and non-executive directors will sit together and the chairman works closely with CEO, furthermore, board committee for audit, payment for staff and nomination. Benefits of single tier board are
27、pointed in the following: they are efficient and effective because this model can reduced layers of management, due to only one board, major decisions can be making and applied easily and speedily, they also could reduced bureaucracy. There are also some disadvantages of one-tier board. A unitary bo
28、ard is inadequate representation of stakeholder. They have too much concentration of power. At last they reduced accountability and potential for key positions to be manipulated. Two-tier board is typical of Germany or Japan tradition; As their name under this system the companys administration is d
29、ivided into two different bodies: the management board and supervisory board. The supervisory board consists solely of non-executives and a lower level management board consists of full-time managing directors. The supervisory board is totally independent from management board. The two tier boards f
30、ocus on representation of stakeholders and they could control over powerful groups of senior managers. Separation of roles is another benefit of two-tier board, different board focus on the different aspects like managing enterprise and supervising the board is separate. This system is safe, because
31、 management board and the supervision board are interaction together to make sure they do not make mistake. All these are the advantages of two-tier boars model. The disadvantage of this system is the structure is complex and as their characteristic it is hard and slow to make decisions. This model
32、also easy causes too much bureaucracy and conflicts of interest. Form the structure aspect the management structure of two-tier board is unwieldy and brings inefficient and ineffective communications. Another point is disruptive presence cause conflicting interest groups. Further, this system is cos
33、tly for whole company. The aim of corporate governance is to provide effective, entrepreneurial and judicious management which could achieve the long-term success of a company. The first form of the UK Corporate Governance Code was produced in 1992 by the Cadbury Committee. The code is a guide to a
34、mount of key components of effective board repetition. This code is based on the fundamental principles of all good governance: transparency, responsibility and focuses on sustainable success in the longer term. For the UK there are five main principles of the code: leadership, Effectiveness, accoun
35、tability, remunerations and relationship with shareholders. The Code has been enduring, but it is not immutable. Its fitness or change as the changing of economic and social business environment requires (FRC 2012). The code is more like a standard to guide corporate governance in correct direct and
36、 better governance a company. 3 Barclays corporate governance Taking a step back, what is meant by corporate governance? The UK Corporate Governance Code (the Code) is based on the widely-accepted definition of corporate governance as the system by which companies are directed and controlled。said by
37、 Sir David Walker, the chairman of Barclays. The code makes clear that the corporate governance is about what the board of the company does and how to created value. In 2012, Barclays are sound of the scandal about the LIBOR announcement. Therefore, the new board of the Chairman pointed, Changing Ba
38、rclays culture is a critical component in rebuilding trust and real change is required. In order to build a good reputation and good corporate governance Barclays has established a well-defined and well-structured corporate governance framework. This help they achieve the boards aim and long term an
39、d sustainable value. Moreover, it is very important to establish the right culture, value and behaviors both at the top management level and though out the whole company. For their company in this stage they focus on three particular areas: the right culture, running Barclays the right way and respo
40、nding to regulation. Their corporate governance formwork can be shown in the follow. （）3.1 Board of directors The board of directors is made up by 13 people and included two female. Overview all these directors they are all have a wide range of experience and skills. The youngest director of the boa
41、rd is Dambisa Moyo whose age is at 44, Dambisa is also a female director. The average age member of the board is over 60 years old. From these people we could know Barclays are focus on the real experience on operate and management the company. They have the ability and skills to due with lots of pr
42、oblems. In another aspect, all these directors are the non-executives director and they are also the membership from the five different committees. 3.2 Corporate governanceForm the formwork, Barclays is the traditional one-tier board. For analysis the companys corporate governance we will focus on t
43、he leadership, effectiveness, accountability and relations with shareholders the four aspects that are the main principles of the UK code in the above we have mentioned. Leadership The responsibility of the board is to creating and proving a sustainable shareholder value to endorse the long-term suc
44、cess of Barclays. The boards also guides and provides direction of management to setting their strategy and supervise the managements application. Furthermore, the board is responsible to keep an effective system about internal control and maintains an effective risk management and supervision proce
45、ss around the company. They should make sure the growth is under controlled and in a sustainable way. The board has the response to defining and promoting Barclays values, culture, purpose and behavior in a collective vision. The board has the power to make key decision and specific matters have res
46、erved for approval also by the board. The groups strategy, mergers or disposals, approval of risk appetite, board membership, capital and liquidity matters and other tings like these are including in the corporate governance framework. The Chairman of each Board Committee reports to the Board on the
47、 matters discussed at Board Committee meetingsEffectiveness For Barclays, in order to ensure the right mix on the board and the committees with more effective way, they regularly to review the composition, experience and balance of skills on the board. Currently Barclays there are 13 directors on th
48、e board. In these members of the board, there is an independents Chairman, two executive Directors and ten independent non-executive directors. All of these directors are have a lot of experience and have a wide rang of skills. Barclays are focus on the diversity of the board and the value they created. The main diversity is reflecting on the board gender balance. There are two female on the board that is 15 per cent of it. Further, there are only there member have the lengthiest of tenure of non-executive directors about 6-9 years. Most of NEDs are 3-6 years and another three are 0-