Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Needed: more competent company boards

15.06.2010
Research at the University of Gothenburgs point out that more competent company boards are needed.

The IT bubble burst and cases like the Skandia and Enron scandals called for measures to promote trust in the Swedish business sector. When the Swedish Code of Corporate Governance came into force in 2005, it encouraged all companies required to apply the Code to establish a Board Audit Committee. Four years later, on 1 July 2009, the recommendation became a legislated requirement.

But are audit committees effective at promoting trust in companies listed on a regulated stock market? And how do companies deal with the increased need for qualified competence? A new doctoral thesis by Ann-Christine Mjölnevik, researcher at the School of Business, Economics and Law, University of Gothenburg, sets out to find answers to these questions.

Companies listed on a regulated stock market are obliged to apply the Swedish Code of Corporate Governance, which requires companies to establish a board audit committee. The task of the committees is to prepare the boards’ work with the control of the companies’ financial reporting. Their members must be external to the companies and at least one in each committee must be proficient in accounting or auditing. The overall purpose of the Code, also known as the Company Code, is to improve the governance of Swedish companies and thereby promote trust in the entire business sector. Another purpose is to increase awareness of and confidence in the Swedish corporate governance among foreign investors and, in doing so, increase access to venture capital.

Mjölnevik’s thesis, titled ’Audit Committee – A study of trust, justice and responsibility’, explores how the audit committees carry out their work, how committee members and company boards feel about the Company Code, and how the Code has affected the recruitment of competence to company boards. The study emphasises not only that the committees must possess the right qualifications, but also that they must have the opportunity to communicate with the public supervisory body. Yet, Mjölnevik concludes that this is not always the case.
’New rules are constantly introduced in the field of corporate governance, often in response to certain problems or crises. This increases the need for competence in company boards, but the need is not always met’, says Mjölnevik.
Mjölnevik says that there is also a need for a support system that includes the public supervisory board. She uses U.S.A. as an example, where companies can turn to the U.S. Securities and Exchange Commission for support and guidance.

’I have found that the tasks that audit committee members are expected to master require qualified competence and an active dialogue with public supervisory bodies regarding all the rules and guidelines that the companies must adhere to. Today, companies often simply have to rely on their auditors, but that’s not enough. These parts, together with internal norms that support responsible conducts, are crucial to the ability of audit committees to promote trust in listed companies.’

For more information, please contact:
Ann-Christine Mjölnevik,
+46 31 786 55 69
+46 31 786 55 69
ann-christine.mjolnevik@gri.gu.se
The thesis was publicly defended on 28 April 2010
Author: Ann-Christine Mjölnevik
Title: Audit Committee – A study of trust, justice and responsibility
Department: Department of Business Administration, School of Business, Economics and Law, University of Gothenburg
The thesis abstract is available at:
http://gupea.ub.gu.se/bitstream/2077/22301/1/gupea_2077_22301_1.pdf

Helena Aaberg | idw
Further information:
http://www.gu.se/
http://gupea.ub.gu.se/bitstream/2077/22301/1/gupea_2077_22301_1.pdf

More articles from Studies and Analyses:

nachricht New study from the University of Halle: How climate change alters plant growth
12.01.2018 | Martin-Luther-Universität Halle-Wittenberg

nachricht Disarray in the brain
18.12.2017 | Universität zu Lübeck

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Optical Nanoscope Allows Imaging of Quantum Dots

Physicists have developed a technique based on optical microscopy that can be used to create images of atoms on the nanoscale. In particular, the new method allows the imaging of quantum dots in a semiconductor chip. Together with colleagues from the University of Bochum, scientists from the University of Basel’s Department of Physics and the Swiss Nanoscience Institute reported the findings in the journal Nature Photonics.

Microscopes allow us to see structures that are otherwise invisible to the human eye. However, conventional optical microscopes cannot be used to image...

Im Focus: Artificial agent designs quantum experiments

On the way to an intelligent laboratory, physicists from Innsbruck and Vienna present an artificial agent that autonomously designs quantum experiments. In initial experiments, the system has independently (re)discovered experimental techniques that are nowadays standard in modern quantum optical laboratories. This shows how machines could play a more creative role in research in the future.

We carry smartphones in our pockets, the streets are dotted with semi-autonomous cars, but in the research laboratory experiments are still being designed by...

Im Focus: Scientists decipher key principle behind reaction of metalloenzymes

So-called pre-distorted states accelerate photochemical reactions too

What enables electrons to be transferred swiftly, for example during photosynthesis? An interdisciplinary team of researchers has worked out the details of how...

Im Focus: The first precise measurement of a single molecule's effective charge

For the first time, scientists have precisely measured the effective electrical charge of a single molecule in solution. This fundamental insight of an SNSF Professor could also pave the way for future medical diagnostics.

Electrical charge is one of the key properties that allows molecules to interact. Life itself depends on this phenomenon: many biological processes involve...

Im Focus: Paradigm shift in Paris: Encouraging an holistic view of laser machining

At the JEC World Composite Show in Paris in March 2018, the Fraunhofer Institute for Laser Technology ILT will be focusing on the latest trends and innovations in laser machining of composites. Among other things, researchers at the booth shared with the Aachen Center for Integrative Lightweight Production (AZL) will demonstrate how lasers can be used for joining, structuring, cutting and drilling composite materials.

No other industry has attracted as much public attention to composite materials as the automotive industry, which along with the aerospace industry is a driver...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

10th International Symposium: “Advanced Battery Power – Kraftwerk Batterie” Münster, 10-11 April 2018

08.01.2018 | Event News

See, understand and experience the work of the future

11.12.2017 | Event News

Innovative strategies to tackle parasitic worms

08.12.2017 | Event News

 
Latest News

Rutgers scientists discover 'Legos of life'

23.01.2018 | Life Sciences

Seabed mining could destroy ecosystems

23.01.2018 | Earth Sciences

Transportable laser

23.01.2018 | Physics and Astronomy

VideoLinks Science & Research
Overview of more VideoLinks >>>