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 Europe’s Demographic Future. Where the Regions Are Heading after a Decade of Crises
10.08.2017 | Berlin-Institut für Bevölkerung und Entwicklung

nachricht Scientists reveal source of human heartbeat in 3-D
07.08.2017 | University of Manchester

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: Fizzy soda water could be key to clean manufacture of flat wonder material: Graphene

Whether you call it effervescent, fizzy, or sparkling, carbonated water is making a comeback as a beverage. Aside from quenching thirst, researchers at the University of Illinois at Urbana-Champaign have discovered a new use for these "bubbly" concoctions that will have major impact on the manufacturer of the world's thinnest, flattest, and one most useful materials -- graphene.

As graphene's popularity grows as an advanced "wonder" material, the speed and quality at which it can be manufactured will be paramount. With that in mind,...

Im Focus: Exotic quantum states made from light: Physicists create optical “wells” for a super-photon

Physicists at the University of Bonn have managed to create optical hollows and more complex patterns into which the light of a Bose-Einstein condensate flows. The creation of such highly low-loss structures for light is a prerequisite for complex light circuits, such as for quantum information processing for a new generation of computers. The researchers are now presenting their results in the journal Nature Photonics.

Light particles (photons) occur as tiny, indivisible portions. Many thousands of these light portions can be merged to form a single super-photon if they are...

Im Focus: Circular RNA linked to brain function

For the first time, scientists have shown that circular RNA is linked to brain function. When a RNA molecule called Cdr1as was deleted from the genome of mice, the animals had problems filtering out unnecessary information – like patients suffering from neuropsychiatric disorders.

While hundreds of circular RNAs (circRNAs) are abundant in mammalian brains, one big question has remained unanswered: What are they actually good for? In the...

Im Focus: RAVAN CubeSat measures Earth's outgoing energy

An experimental small satellite has successfully collected and delivered data on a key measurement for predicting changes in Earth's climate.

The Radiometer Assessment using Vertically Aligned Nanotubes (RAVAN) CubeSat was launched into low-Earth orbit on Nov. 11, 2016, in order to test new...

Im Focus: Scientists shine new light on the “other high temperature superconductor”

A study led by scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg presents evidence of the coexistence of superconductivity and “charge-density-waves” in compounds of the poorly-studied family of bismuthates. This observation opens up new perspectives for a deeper understanding of the phenomenon of high-temperature superconductivity, a topic which is at the core of condensed matter research since more than 30 years. The paper by Nicoletti et al has been published in the PNAS.

Since the beginning of the 20th century, superconductivity had been observed in some metals at temperatures only a few degrees above the absolute zero (minus...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Call for Papers – ICNFT 2018, 5th International Conference on New Forming Technology

16.08.2017 | Event News

Sustainability is the business model of tomorrow

04.08.2017 | Event News

Clash of Realities 2017: Registration now open. International Conference at TH Köln

26.07.2017 | Event News

 
Latest News

What the world's tiniest 'monster truck' reveals

23.08.2017 | Life Sciences

Treating arthritis with algae

23.08.2017 | Life Sciences

Witnessing turbulent motion in the atmosphere of a distant star

23.08.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>