Share buybacks: a question of governance?
The UK government is investigating share buybacks, but could capital allocation be a subject for more disclosure and the corporate governance code?
Image: JensHN/Shutterstock
The common practice of share buybacks is on the UK government’s agenda. In late January the department for business, energy and industrial strategy (BEIS) announced that it is engaging PwC to conduct a study on potential abuses of buybacks as a new initiative in the broad package of corporate governance reforms that was announced by the government in August last year.
A share buyback is not intrinsically flawed, nor is it a complex mechanism of financial engineering; it simply amounts to a company purchasing its own stock on the open market.
While BEIS is aware of the legitimate uses of buybacks, its study will focus on the dar
For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda
Related Stories
-
What scandal is waiting to be exposed at your company?
Non-compliant conduct is already taking place somewhere inside your operations. And scandal is one of your greatest business risks.
-
The future after Brexit
The UK has voted to leave the European Union. The country's leaders must now negotiate an exit. The uncertainties for corporate governance and company strategy are as great as they have ever been.
-
Why the pay debate refuses to go away
Transparency, alignment and the impact on employees are all considerations when forming an approach to rising levels of executive pay.
