Wednesday, 7 April 2010

UK: BIS Committee calls for wide-ranging review of corporate governance

The Business, Innovation and Skills Committee yesterday published its report Mergers, acquisitions and takeovers: the takeover of Cadbury by Kraft. The report is available here (html) and here (pdf). The Committee concluded its report with this recommendation for its successor:

The takeover of Cadbury by Kraft has highlighted a number of important issues in respect of the way in which foreign takeovers of UK companies are conducted. It has been the catalyst for a wider debate, both in Government and in the City, about how takeovers are conducted. In highlighting the Kraft takeover of Cadbury, we have contributed to that debate which now needs to continue, and with urgency. Time does not allow us to consider the wider proposals for reform in detail but it is clear that the Companies Act 2006 has not resolved these major issues in corporate governance. We urge our successor Committee to consider this Report as a starting point from which to conduct a detailed inquiry into these important issues and into the role of shareholders and managers of companies more generally. Recent experience of the behaviour of boards and shareholders in situations ranging from the fall of RBS to the Kraft acquisition of Cadbury indicate that it is time to reconsider many aspects of corporate governance".

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