Corporate Governance Analysis 2022

Running head: CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Name of the student
Name of the university
Author note

CORPORATE GOVERNANCE1
Potential liability of the company
The liability regime of the non-executive as well as executive director of the company
creates a requisite corollary to the control issues in an enterprise. It is rest on the determination of
the particular obligation it construct the extent of management conduct and it facilitates
stakeholders as well as third parties pact with the corporation with the legislative safeguard
against the misconduct of management. In that aspect the liability of the director of the company
is a significant and efficient compliance and also mechanism of risk allocation in the enterprise1.
The participation of the employee can play a significant character in the effect that the
regulations on the duties of the director and also potential liability have in run through.
The analysis and comparison concerning the substantive statute that regulates the duties
of the directors shield extensive range of procedural and material aspects noticeably the
following. Firstly who possess the obligation and to whom addresses the obligation. Secondly
how and where the duties of the directors of the company can be discoursed in the legislation
under regulatory method. Thirdly, the method interest of the enterprise is defined2. Fourthly what
symbolizes the material content of the duties of director that is duty of loyalty and care. Fifthly
the nature of potential liability shield in particular the scope to which the director is responsible
in respect of decision that was adopted by board. Sixthly it describe the category of obligation
1 Miller, Geoffrey P.
The law of governance, risk management, and compliance. (Wolters
Kluwer Law & Business, 2017).
2 Choudhary, Usman, et al. "System and method for auditing governance, risk, and compliance using a pluggable
correlation architecture." 2018 U.S. Patent No. 10,057,285. 21 Aug.

CORPORATE GOVERNANCE2
moving from the violation of responsibility as well as the restriction to the liability. The
legislation of the member nation is diverse in respect of both general method to regulation of
duties of director that is grounded on the structure of the statutory rules or the general doctrines
of legislation that is law of agency or fiduciary principles3. They are amplified and elaborate by
the adjudicating authority and the margin of description with which the obligations are set forth.
The most complicated portion includes those individuals who do not conduct as they
were de jure directors nor purports to be the directors. They rather practice certain level of
influence over the affairs of the corporation that provides them a margin of factual dominion in
comparison to the authority that is typically rest to the board. furthermore theoretically in the
jurisdiction of civil law the direct legal association between the shareholders, directors and other
constituencies may evolve from application of general doctrines of law especially tort law. The
general clauses of tort law that can be observed in several jurisdiction might expose that
probability as they facilitate for obligation for any injury that was caused due to the negligent or
intentional tort. Nevertheless, the court limit the application of general provision and in some
jurisdiction general doctrines do not observe to function a significant character in practice4. The
third category of the jurisdiction of civil law demarcates legislation between the internal
obligation of director to the company as well as external obligation to the shareholders or third
parties5. The external liability generally necessitate the behavior that goes beyond mere conflicts
3 Sadgrove, Kit.
The complete guide to business risk management. (Routledge, 2016).
4 Griffith, Sean J. "Corporate governance in an era of compliance." 2018 Wm. & Mary L. Rev. 57 2075.
5 Crête, Raymonde. "The Volkswagen scandal from the viewpoint of corporate governance." (2016)
European
Journal of Risk Regulation 7.1 25-31.

CORPORATE GOVERNANCE3
or management of interest and is generated by the violation of specific legal necessities of the
corporation laws or articles of association, behavior that hamper exclusively the entitlement of
shareholders or drawing up misleading accounts.
Governance issues
All the corporation with premium listing on main market irrespective of their country of
registration required to apply under the Corporate Governance Code of United Kingdom as well
as facilitate the shareholders with anti-dilutive preventive entitlement when there is issuance of
new shares. The corporation with the global depositary rights or Standards Listing of Shares
have to comply with the minimum requirements of EU that involves requirements under EU
company reporting directive to facilitate the statement of corporate governance amplifying the
code of corporate governance to which the issuer is subject as well as description of internal
control and risk management structure of the company6. The section of the corporate governance
code of United Kingdom are regarded to be high grade standards of governance. Financial,
operational, strategic and governance issues have dominated engagement in between the
investors and board of the company. Nevertheless more attention is required to be paid on risk
connected to ethical conduct of business, environment, health and safety, labor relation due to
the potential significant impact on the performance of the company7. The issue that can be raised
6 Talesh, Shauhin A. "Data breach, privacy, and cyber insurance: How insurance companies act as “compliance
managers” for businesses." (2016)
Law & Social Inquiry 43.2 417-440.
7 Soltani, Bahram, and Christian Maupetit. "Importance of core values of ethics, integrity and accountability in the
European corporate governance codes." (2016)
Journal of Management & Governance 19.2
259-284.