Corporate Governance is one of those terms that you hear a lot, especially within legal and business circles, but what is it and why is it so important for law students to understand it in the modern workplace? To find out more, we sat down with ULaw Leeds Campus Dean and tutor, Matthew Tomlinson.
As individuals in society we are all effectively stakeholders of companies and are affected by the way in which companies operate. We all have a vested interest that companies are run correctly and are held to account for their actions. If you buy shares in a company that makes reckless decisions and becomes insolvent, you lose your money. If a company pollutes the environment you live in, or closes down a local operation making many redundant, you are again adversely impacted. Equally, if a company uses overseas operations to source cheaper labour, but the workers are exposed to terrible conditions and poor pay, you may wish to see this unethical behaviour stopped.
Corporate Governance is about the way in which a company is run and is therefore relevant to all of us. It is widely recognised at a global level that companies have a responsibility to the environment and society in which they operate, and therefore have a duty to run their operations in a way that protects the interests of their stakeholders. Corporate Governance is about companies creating a framework of policies and procedures that enable them to police their own internal operations to ensure the company conducts itself in a proper manner.
At ULaw we offer two Corporate Governance Master’s courses – an LLM and an MA – with a distinct difference between them. Our LLM Corporate Governance is best suited to students who have completed a Qualifying Law Degree, whereas our MA Corporate Governance is more suited to students who studied something other than law at undergraduate level. The LLM is the standard award for Law School Master’s Programmes. LLMs can either be general or specialised and, according to the QAA guidance on Master’s degrees, the designation ‘LLM’ should be reserved for programmes where entrants have studied significant amounts of law at undergraduate level. Many specialised areas of law are interdisciplinary, meaning that students from a wide range of backgrounds can pursue in-depth study of a range of fields. For instance, business students would be equally interested in areas such as Corporate Governance because it’s very much a valid area of study for anyone interested in business management. By providing our Corporate Governance course as both an LLM and an MA we are able to offer access to the same specialised areas of study to both law and non-law graduates.
Our Corporate Governance LLM and MA are particularly relevant to students wishing to pursue a career as a Company Secretary. They would be equally relevant to those wishing to pursue careers as solicitors, accountants and especially those aspiring to hold senior management positions in large corporations. We’ve designed these courses to be a balanced blend of learning the academic theory and practical applications of Corporate Governance. They’re designed to equip students with a sound operational knowledge of Corporate Governance in today’s business world.
It’s an interesting time to study Corporate Governance in the UK. The key framework in operation is called the UK Code but it’s not a legislative requirement that all companies follow it. Only UK listed companies have to adopt the Code, and even then, they need only adhere on a ‘comply or explain’ basis, which means it’s not exactly enforced or followed to the letter. The Code encourages good practice, but there is no prescribed set of rules that every company must comply with. The position in the US is quite different; the Sabanes-Oxley Act sets a strict legal governance requirement for US companies to follow so their landscape is less flexible than ours and has been criticised for imposing onerous reporting conditions on companies that are extremely costly to them. There’s currently much debate as to whether the law in the UK needs to be tightened up so that all companies over a certain size are required to comply with the UK Code.
The world of Corporate Governance is ever changing. It’s responsive to political environments at an international level. Our LLM and MA programmes introduce and explore the live topics and debates around current issues in Corporate Governance. The aim is to give our students the experience and skills to identify and then advise on changes to corporate practice once in the workplace.
Corporate Governance is a hugely relevant area in today’s commercial world. Over the past 20 years the requirements for companies to observe stricter practices and show their compliance has increased immeasurably. As a result the company secretarial and legal professions in this areas have grown significantly. For me, the Corporate Governance in Practice module is really interesting as it covers the evolution of Corporate Governance requirements to date and looks at how companies and their boards are run as a consequence. It is a practical module that centres very much on you being able to advise boards on matters of compliance corporate governance and compliance in different industry sectors.
Anyone considering a Master’s in Corporate Governance should consider what they’d like to do with it. Corporate Governance is a growing sector and there are a diverse range of roles on offer. For instance, you may wish to work within a big governance team within an accountancy firm, or you may wish to work as part of a smaller team in-house. If you are interested in working in-house, there may be a particular sector or type of company you wish to work for. Getting exposure to that sector and the profession in general, as well as making good contacts, is key as this will help you decide how you’d like to progress your career. And the sooner you start this, the better.