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Chris Hughes

A Radical Plan to Curb the Lure of the UK Buyout

The UK’s daunting public-company governance rules may explain why more companies are going private. The regime merits an overhaul.

Rewrite the rules.

Rewrite the rules.

Photographer: Leon Neal/Getty Images Europe

It’s open season on UK financial regulation. The latest target is a real sacred cow — the 30-year-old UK Corporate Governance Code that dictates boardroom best practice. The tome is subject to yet another review, prompting a pair of law professors to suggest abolishing it completely. This is a highly provocative call. But it might not be radical enough.

The first version of the code landed in 1992 after Adrian Cadbury, of the Cadbury business family, was commissioned to draw lessons from a raft of British business blow-ups. He focused on strengthening oversight of company audits and boosting the role of outside directors. The original guidelines have since mushroomed in response to subsequent government reviews, adding directives on pay and the broader role of non-executives.