I fully share the Company Law Review's belief that we must end this through a 'think small first' approach. These are important areas where we need to reform company law to provide a clear, simple framework for modern companies. The publication of the Economist Intelligence Unit's UK Country Forecast today confirms that the UK is the second most attractive business location in the world. I believe that a clear, simple company law framework should be part of that business environment. We need to modernise the legal framework to maintain our competitive position.
Corporate governance lies at the very heart of the debate on company law.
One important aspect of corporate governance is the system by which large companies are controlled and directed. The work of Cadbury, Greenbury and Hampel has provided a firm basis for this - most recently through the Combined Code. I believe that in general the issues dealt with under the Code are more suitable for best practice than legislation. Best practice is more flexible, enabling companies to fit their own particular circumstances. It can be updated more easily.