-Principle based (In the UK, TheUK corporate governance code): These consist of principles, which should befollowed unless there is a justifiable explanation as to why not.
*Leadership
*Effectiveness
*Accountability
*Remuneration
*Relationship with shareholders
-Rule based (In the USA, theSarbanes-Oxley): This provides a set of rules which must be followed in allcircumstances and it includes punishment for non-compliance.
In the UK, corporate governance has been developed through a number ofcodes that have been endorsed by the stock exchange. Such codes are:
-The Cadbury report (1992):Recommend a code of best practice
-The Greenbury report (Early1995): Focused on directors pays
-The Hampel report (1998): Produce acombine code of principles of good governance and best practice
-The Higgs report (2003): Recommendchanges to the combined code to require a greater proportion of independent, better informed non-executivedirectors on the board
-The smith report (2003): Maderecommendations with regards to audit committees.


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