Jurisdiction(s):
United Kingdom

Key definition

Corporate governance definition

What does Corporate governance mean? Corporate governance describes the system by which a company is directed and controlled: how the board, management and shareholders exercise authority, make decisions, manage risk and ensure accountability, transparency and long-term success. In practice it covers board composition (including independent non-executive directors), division of responsibilities, audit and internal controls, remuneration, shareholder rights, stakeholder engagement and reporting. The term is descriptive rather than a single statutory concept. In the UK, expectations are set mainly by soft-law codes (notably the UK Corporate Governance Code on a “comply or explain” basis, and the Wates Principles for large private companies) alongside companies legislation (for...

UK corporate governance and share schemes: Code framework, investor guidelines, Wates Principles, comply or explain reporting, AIM requirements and financial services remuneration

Published by a LexisNexis Share Incentives expert

Practice notes

This Practice Note covers:

the meaning of Corporate governance
Governance considerations for private companies
the UK stance on corporate governance in relation to share schemes, including:
- the regulatory position on share schemes
- institutional investor guidance
how companies assess and monitor their compliance with the UK Corporate Governance Code (the Code)
corporate governance for financial services firms as contrasted with other businesses

This Practice Note sets out the core ideas of corporate governance and directs readers to fuller, more detailed Practice Notes on each regulatory and legislative strand of the UK framework, as well as the institutional investor guidelines.

What is corporate governance?

In broad terms, corporate governance concerns how companies are directed and controlled at the highest level. The governance framework aims to establish arrangements that ensure fair treatment across a company’s various stakeholders. The Cadbury Report of 1992 is widely seen as the original foundation of corporate governance in the UK, and characterises corporate governance as: ‘…the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies.’ ...

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Graham Muir

CMS

Graham Muir is a partner in CMS tax team with a 25-year track record of specialism in employee incentive scheme and employment tax issues.Graham advises quoted and unquoted companies on structuring, establishing and operating all forms of employee incentive scheme. He advises on the employer and employee tax, company law, corporate governance and regulatory issues arising out of such schemes (whether share based or cash based).Graham was a founder member of the HMRC Employment-related Securities Forum, is a member of the Consulting Tax Editorial Committee of LexisNexis and is Co-Chair of the Tax Committee of the Share Plan Lawyers group....

Web page updated on 22/05/2026

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