Corporate Governance Liability Reforms Post The Credit And Financial
Crisis
This case is based on recommendations on Corporate Governance
is aimed primarily at companies whose shares are admitted to trading on
a regulated market. The objective is that the recommendations are also appropriate
for all companies to comply with laws, mandates and principles of good governance
to create value.
"Based on the existing information
provided to the Court is convinced that the seven accused members of the
board have acted gross negligently when reporting the results of the Bank.
To this respect it should be emphasized that they in spite of the world
crises at hand, that had led to significant falls in the value of stocks
and shares and brought many trading and industrial companies in a very
difficult situation, neither during the time before the reporting of the
results nor by the time of the reporting itself did anything of real importance
in order to bring clarity to the true position of the bank and to the
extent they tried to, they were satisfied with the explanations given
by those directors, that with their incompetent management had contributed
to the challenging position of the bank."
The above could be a fictive court ruling but may very well affect your
company, the board, management or the statutory auditors.
Recommendations on corporate governance;
- The recommendations are based on, and supplement, company law and
stock exchange regulation, and such rules and regulations are presumed
known.
- The recommendations or parts hereof may provide inspiration for
non-publicly traded companies. For example state-owned companies,
other companies of particular public interest and certain companies
owned by funds.
- The recommendations enable the individual company to organize its
governance optimally in accordance with the 'comply or explain' principle.
Thus, non-compliance is not inconsistent with the spirit of the recommendations,
but merely a result of the fact that the company has chosen a different
approach.
The above is an example and could quite as well be valid for any company
as presented at the 8th annual European GRC summit by prof Lars Bo Langsted
from Aalborg University, a leading European authority on Board of Director's
liabilities and responsibilities and Auditors responsibilities and liabilities.
