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 Drone vs. truck deliveries: Which create less carbon pollution?
31.05.2017 | University of Washington

nachricht New study: How does Europe become a leading player for software and IT services?
03.04.2017 | Fraunhofer-Institut für System- und Innovationsforschung (ISI)

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: Can we see monkeys from space? Emerging technologies to map biodiversity

An international team of scientists has proposed a new multi-disciplinary approach in which an array of new technologies will allow us to map biodiversity and the risks that wildlife is facing at the scale of whole landscapes. The findings are published in Nature Ecology and Evolution. This international research is led by the Kunming Institute of Zoology from China, University of East Anglia, University of Leicester and the Leibniz Institute for Zoo and Wildlife Research.

Using a combination of satellite and ground data, the team proposes that it is now possible to map biodiversity with an accuracy that has not been previously...

Im Focus: Climate satellite: Tracking methane with robust laser technology

Heatwaves in the Arctic, longer periods of vegetation in Europe, severe floods in West Africa – starting in 2021, scientists want to explore the emissions of the greenhouse gas methane with the German-French satellite MERLIN. This is made possible by a new robust laser system of the Fraunhofer Institute for Laser Technology ILT in Aachen, which achieves unprecedented measurement accuracy.

Methane is primarily the result of the decomposition of organic matter. The gas has a 25 times greater warming potential than carbon dioxide, but is not as...

Im Focus: How protons move through a fuel cell

Hydrogen is regarded as the energy source of the future: It is produced with solar power and can be used to generate heat and electricity in fuel cells. Empa researchers have now succeeded in decoding the movement of hydrogen ions in crystals – a key step towards more efficient energy conversion in the hydrogen industry of tomorrow.

As charge carriers, electrons and ions play the leading role in electrochemical energy storage devices and converters such as batteries and fuel cells. Proton...

Im Focus: A unique data centre for cosmological simulations

Scientists from the Excellence Cluster Universe at the Ludwig-Maximilians-Universität Munich have establised "Cosmowebportal", a unique data centre for cosmological simulations located at the Leibniz Supercomputing Centre (LRZ) of the Bavarian Academy of Sciences. The complete results of a series of large hydrodynamical cosmological simulations are available, with data volumes typically exceeding several hundred terabytes. Scientists worldwide can interactively explore these complex simulations via a web interface and directly access the results.

With current telescopes, scientists can observe our Universe’s galaxies and galaxy clusters and their distribution along an invisible cosmic web. From the...

Im Focus: Scientists develop molecular thermometer for contactless measurement using infrared light

Temperature measurements possible even on the smallest scale / Molecular ruby for use in material sciences, biology, and medicine

Chemists at Johannes Gutenberg University Mainz (JGU) in cooperation with researchers of the German Federal Institute for Materials Research and Testing (BAM)...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Plants are networkers

19.06.2017 | Event News

Digital Survival Training for Executives

13.06.2017 | Event News

Global Learning Council Summit 2017

13.06.2017 | Event News

 
Latest News

Study shines light on brain cells that coordinate movement

26.06.2017 | Life Sciences

Smooth propagation of spin waves using gold

26.06.2017 | Physics and Astronomy

Switchable DNA mini-machines store information

26.06.2017 | Information Technology

VideoLinks
B2B-VideoLinks
More VideoLinks >>>