The role of government in corporate governance: Perspectives from the UK

Abstract

Incessant corporate failures have led to increasing governmental participation in the governance of the modern corporation. In this conceptual paper, we examine and propose that the role of government in the UK corporate governance system is four fold, namely: to enhance competitive advantage; to compensate for the failure of self-regulation; to prevent corporate scandals and restore investors’ confidence; and owing to significant public pressures and associated political undertones, to suggest to the public the government is still an effective overseer in the existing prominence of self-regulation. We contribute to the literature on corporate governance, politics, policy making and regulatory institutions, whilst raising important issues that are of practice and policy relevance.