The Rise of Corporate Governance in the U.K.: When and Why

Abstract

While issues that prompt corporate governance responses are endemic to the corporate form, the term “corporate governance” only began to feature with any regularity in discussions of public companies in Britain as the 1990s got underway. It is well known that work done by the Committee on the Financial Aspects of Corporate Governance, known as the Cadbury Committee, played a major role in fostering the rise of corporate governance in the U.K. at that point. This paper explains why the topic did not move into the spotlight in Britain in the 1970s, a development that might have been anticipated given that explicit references to “corporate governance” were beginning in earnest then in the United States. The paper also identifies trends that likely would have ensured that corporate governance would have risen to prominence in Britain in the early 1990s in the absence of the Cadbury Committee’s deliberations.

Keywords: corporate governance, boards of directors, takeovers, executive pay

JEL Classification: G34, G38, K22, N24