HM Treasury

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67/09

16 July 2009

Government welcomes publication of Walker review

The Government strongly welcomes Sir David Walker’s proposals for the reform of the corporate governance of UK banks and other financial institutions.

Lord Myners, the Financial Services Secretary to the Treasury said:

“Corporate governance failures were a major contributor to the financial crisis.  The responsibility for the actions that led the global financial sector to the brink of collapse ultimately rests with the people who sat around the bank board tables and those who approved their appointment.

“The weaknesses in board practice, risk management, control of remuneration and exercise of ownership rights identified by the Review must be addressed. 

“Board members in future must ask tougher questions of their chief executives.  They need to spend far more time fulfilling their responsibilities. Shareholders must ensure that directors have the skills necessary for the tasks required.

“Sir David has put forward detailed and comprehensive proposals, setting a new benchmark for best practice both nationally and internationally.

“The consultation process now needs to look not just at the proposals, but also how to implement and, if necessary, take them further, including their applicability to non-financial sector firms.

“International adoption of similar measures would also reinforce corporate governance and contribute significantly to financial stability.  Therefore, the Government will take steps to ensure that proposals to improve corporate governance are considered internationally.”

Notes for editors

1. The Walker Review of Corporate Governance of UK Banking Industry was announced on 9 February 2009 by the Chancellor of the Exchequer, the Secretary of State for Secretary of State for Business, Innovation & Skills, and the Financial Services Secretary to the Treasury.

2. The Terms of Reference for the review were to examine corporate governance in the UK banking industry and make recommendations, including in the following areas:

3. On 21 April, the Terms of Reference were extended so that the Review should also identify where its recommendations are applicable to other financial institutions.

4. The review consultation document is published on 16 July.  The consultation period will run until 1 October 2009 and the final report will be published in November 2009.

5. Sir David Walker is a Senior Advisor to Morgan Stanley. He is a former Executive Director of the Bank of England, former Chairman of the Securities and Investments Board and a former Chairman of Morgan Stanley International. In 2008 he chaired in independent industry working group which drew up a voluntary code to improve levels of disclosure in the private equity industry and its communication with stakeholders.

 

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