CORPORATE GOVERNANCE AND THE BOARD’S LOCUS OF CONTROL – THE CASE OF THE ABI’S TREATMENT OF FOOTPRINTS

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Abstract

This paper discusses the degree to which codes of corporate governance and the guidelines that develop around them tend to shift the locus of control away from the board of directors. It is argued that even in principles-based codes of governance such outcomes are an unavoidable consequence and that policy makers should weigh such consequences carefully before promulgating codes and guidelines. The case of the treatment of footprints (incentive plan performance averaging periods) by the UK’s Association of British Insurers (ABI) is analysed to illustrate the problem.

Keywords: corporate governance, board process, executive remuneration, remuneration committee

How to cite this paper: Main, B. G. M. (2010). Corporate governance and the board’s locus of control – The case of the ABI’s treatment of footprints. Corporate Board: role, duties and composition, 6(3), 60-69. https://doi.org/10.22495/cbv6i3art6