Vol 15 (2018) - Issue 3

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Corporate Governance Consultation

Synopsis
This article looks at the UK Government consultation paper on insolvency and corporate governance. It provides an overview of the four key areas covered by the consultation namely (1) sales of businesses in distress, (2) reversal of value extraction schemes, (3) investigation into the actions of directors of dissolved companies and (4) strengthening corporate governance in pre-insolvency situations. The article analyses the potentially significant legal and policy implications for the UK corporate and insolvency framework, concluding that whether and in what form the proposals are implemented will likely depend on how the political climate evolves in light of Brexit and any further high profile corporate failures.


Introduction
On 20 March 2018 the UK Government published a consultation paper (the ‘Consultation’) with the aim of collecting the views of stakeholders in relation to four key areas of insolvency and corporate governance:
– Sales of businesses in distress
– Reversal of value extraction schemes
– Investigation into the actions of directors of dissolved companies
– Strengthening corporate governance in pre-insolvency situations
This article provides some background to the Consultation together with an overview of each area under consideration. It concludes with some necessarily preliminary thoughts on the legal and policy implications for the UK corporate and insolvency framework and any next steps.