Mc neil - Codes of Best Practice

Mc neil - Codes of Best Practice - MacNeil & Li: Comply...

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MacNeil & Li: “Comply or Explain”: market discipline and non-compliance with the Combined Code (2006) “Comply or explain”: The underlying philosophy “Comply or explain” principle: compliance with the codes is not mandatory, but disclosure relating to compliance is. - Two main considerations speaking against a regime based on mandatory rules (plus 1 additional): 1) Flexibility. As companies subject to the codes differ materially (in terms of size, structure, and organization), it is not possible to adopt a “one size fits all” approach. Two observations: a. Flexibility is already a major feature of the governance structure; but the “flexibility” associated with CG codes differs from the flexibility associated with company law b. Open question: Is flexibility really an appropriate response to the fundamental issue of whether CG codes are capable of exerting a positive influence over financial performance? If it is not clear the CG can lead to improved financial performance, flexibility becomes much
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This document was uploaded on 11/10/2011.

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Mc neil - Codes of Best Practice - MacNeil & Li: Comply...

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