The three-legged stool of corporate governance reform

In March 1998, the London Stock Exchange issued some proposed changes to its Listing Rules. This document incorporates what has become known as the “combined Code” of corporate governance practices, a project of the Committee on Corporate Governance (“the Hampel Committee”). Article by Jayne W. Barnard (Professor of Law, The College of William & Mary, Williamsburg, Virginia, USA) published in Amicus Curiae - Journal of the Institute of Advanced Legal Studies and its Society for Advanced Legal Studies. The Journal is produced by the Society for Advanced Legal Studies at the Institute of Advanced Legal Studies, University of London

Evolutionary Enforcement at the Securities and Exchange Commission

Hundreds of critics in the past eighteen months have heaped abuse on the SEC Enforcement Division. How could the Division have missed so much misbehavior on Wall Street? How could the Division\u27s young lawyers have been charmed by Bernie Madoff and thwarted from discovering his terrible crimes? Most critics seem to agree that the Division\u27s most urgent needs include developing substantially more financial sophistication among Division lawyers and investigators; better communications within the Commission and with other federal agencies; and a meaningful system for handling tips and processing information. The SEC\u27s response to its critics has been remarkable. The Commission has enlisted an energetic cadre of former federal prosecutors to lead the Division. They have redeployed comfortable, desk-bound middle managers back into the field to investigate market misconduct. Reversing the Commission\u27s tradition of micromanagement, they have given senior lawyers new authority to issue subpoenas and initiate settlements. A major reorganization plan is already underway. The SEC, in short, is in the midst of the most significant revamp of the division in the last 30 years. This Article begins with the optimistic hope that the current reorganization is successful in meeting the most urgent needs of the Division. It then sketches out six suggestions for further improving the Enforcement Division: a bounty program to compensate informants who come forward with useful information; a victim services unit; a proposal to develop behavioral expertise within the Division; a surveillance and monitoring program for defendants demonstrating a recidivist profile; a sanction policy for individuals that is proportionate, progressive, remedial, and real; and regular publication of meaningful data regarding losses from fraud in the securities markets

The Hampel Committee Report: A Transatlantic Critique

To an American observer, the activities of the Cadbury, Greenbury and Hampel Committees are impressive, if only because so few lawyers seem to be involved. Unlike the US, where improvements in corporate governance can usually be traced to legislation or litigation, British efforts at self-governance offer an attractive, alternative model. The Hampel Report is disappointing, however, in three respects: the report lacks concrete models; its reliance on the AGM as a mechanism of reform is misplaced; and its failure to recognize internal monitoring programs as an essential element of good corporate governance is shortsighted

Executive Loans from Corporate Funds

The author surveys the laws affecting loans made by a corporation to its executives, including the state loan enabling statutes, the applicable tax laws, and any disclosurerequirements. Also discussed is the applicability of Regulation G to loans made by a corporation to facilitate share purchases by its executives. Finally, the author enumerates the risks inherent in executive lending and makes suggestions for risk minimization