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Title: Post-crisis reforms to the UK regulation of the corporate governance of banking institutions : an analysis of changes to the UK risk governance framework
Author: Zharikova, Elena
ISNI:       0000 0004 9351 9409
Awarding Body: University of Manchester
Current Institution: University of Manchester
Date of Award: 2019
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This thesis focuses on the UK regulations related to the risk governance of banking institutions. Risk governance is a subset of corporate governance arrangements that is designed to ensure the safety and stability of a bank. Flawed risk governance was one of the key reasons for the failures of a number of financial institutions during the 2008 crisis. This thesis aims to answer the following question: Are the reforms to the UK regulation of the corporate governance of banking institutions likely to improve the effectiveness of banks' risk governance arrangements? The research outcomes suggest that a rejection of the neoclassical understanding of corporate governance and its regulation is essential, in order to ensure the effectiveness of the risk governance of banking institutions. The thesis highlights the flawed assumptions that underline the mainstream corporate governance theories and regulation based on these theories. It is argued that corporate governance theory and regulation would greatly benefit from adopting the insights of the organisational and behavioural sciences. The importance of organisational and behavioural influences for the risk governance of banking institutions is demonstrated in the case studies, which analyse the risk governance failures of HBOS, RBS, and Citigroup. The UK reforms concerning the regulation of risk governance are analysed in this context. The reforms analysed include the relevant parts of the post-crisis financial regulation reform and the more recent changes to the general UK corporate governance framework. The analysis shows that the risk governance rules that form a part of the financial regulation reform demonstrate a significant departure from the pre-crisis regime. The new regime does not seem to be informed by the assumptions of neoclassical economic theory, which is likely to improve the effectiveness of risk governance. However, the UK corporate governance framework is still primarily based on the neoclassical understanding of corporate governance, which is likely to undermine the intention of regulators to promote long-termism and curb risk-taking.
Supervisor: Bavoso, Vincenzo Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Stewardship Code ; Group decision-making ; Group biases ; Groupthink ; Pluralistic ignorance ; Analogies ; Institutional investors ; FRC ; Corporate Governance Code ; Risk management ; FCA ; Organisational information processing ; Short-termism ; Financial industry ; Organisational environment ; Shareholder enforcement ; ESG ; Investor stewardship ; Case studies ; Senior Managers Regime ; PRA ; Organisational procedures ; Boards of directors ; Corporate culture ; Financial regulation ; UK financial regulation ; Post-crisis reforms ; Financial crisis ; Banking sector reforms ; Corporate governance ; Agency theory ; Neoclassical economics ; Organisational theory ; Stakeholder theory ; Shareholder wealth maximisation ; Cognitive biases ; Behavioural economics ; Organisational culture ; Organisational decision-making ; Risk governance ; Regulatory theory ; Efficient markets hypothesis ; Economic rationality theory ; Prospects theory