RTTNews - British banks should strictly control bonuses and should offer better training to non-executive members, a government-commissioned report recommended Thursday.
The review of the corporate governance of U.K. banks, by a former executive director at the Bank of England and ex-chairman of Morgan Stanley International David Walker, advised that there is need for board level risk committees chaired by a non-executive. These risk committees should be given the power to scrutinize and if necessary block big transactions.
The report also recommended increased participation of fund managers and other major shareholders with their investee companies with the aim of supporting long-term improvement in performance.
Increased public disclosure about pay of high-paid executives is Walker's another recommendation.
These proposals are designed to improve the professionalism and diligence of bank boards, increasing the importance of challenge in the board environment, Walker said.
These recommendations should bring substantial improvement in the governance of banks. They will not guarantee that failure will be avoided in future but will greatly mitigate the risk.
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