Advantages Of The Enterprise And Regulatory Reform

1249 Words5 Pages
This essay aims to lay out the advantages and disadvantages of the Enterprise and Regulatory Reform Acts 2013’s affect upon corporate governance, and more specifically, executive compensation. Using a selection of sources from the media to give examples and illustrate opinions held by different stakeholders, the essay will provide an overview of the potential changes to the business market in the UK and the factors on which these changes depend. Whilst researching around the topic, I also had an opportunity to speak with several owners of small-medium sized enterprises, SMEs, who gave me an insight into their opinions from working alongside company CEOs. Companies are directed and controlled by a system known as corporate governance, in which boards of directors are responsible for governing their companies. The board of directors have responsibilities such as setting strategy aims for the company, supervising management and providing leadership. They must also report to the shareholders on their duties as directors. Their actions are subject to laws and regulations, as well as the shareholders in a general meeting. The shareholders appoint directors and auditors and must satisfy themselves that the structure in place to govern the company is adequate, (Financial Reporting Council, 2014). The recent economic recession has caused many UK businesses to suffer a fall in revenues, and therefore profits. Due to this, shareholders have angered by their reduced dividends and some
Open Document