Edited by Victoria Younghusband
Publisher: Finance and Investment Research

"Regulatory risk has never been a more serious issue than it is now. Directors must sit up and take notice or they will suffer the consequences." Sir Terry Leahy, chief executive of Tesco.

Recent corporate collapses have served to highlight the need for greater corporate accountability not only in the UK, but worldwide. The might of the regulator backed up by the political will to prevent the recurrence of such destabilising financial scandals is all too apparent. Almost overnight directors' duties and responsibilities have been pushed to the top of every corporate agenda. Directors, eager to address their ignorance and fearful of the consequences of non-compliance with the regulatory regime, are crying out for guidance from the appropriate advisers.

It is hardly surprising, therefore, that this climate has resulted in another book on corporate governance. Written by lawyers and auditors, the book takes a matter of fact route through corporate governance law and regulation with the aim of giving directors a better understanding of the lessons to be learned and the benefits of adopting effective corporate governance strategies.

The book starts with a useful overview of directors' duties and is then followed by a section dealing with corporate governance reporting requirements, addressing the importance of disclosure and transparency under the various corporate governance codes and the listing rules.

The guide goes on to consider the controversial issue of directors' remuneration – always a topical subject that has drawn a lot of negative press attention recently. It draws the director's attention to the public's unease with 'fat cat' pay rises, the risks associated with such pay controversies and the need to find a balance between the conflicting interests of shareholders with those of the directors.

In addition, the book gives an overview on the insider dealing provisions now bolstered by the market abuse rules and further touches on the directors' need to ensure that they have taken steps to implement measures to protect the company from internal and external acts of fraud. Criminal liability of directors and companies is also briefly examined and one chapter is usefully devoted to the important role of independent non-executive directors which is particularly timely in light of the Higgs Review.

The book does, however, lack continuity (probably because of the number of contributors it sought to rely upon) and could not be considered an all-encompassing practical reference guide. For instance it does not focus in sufficient detail on the criminal and civil liabilities of directors (an area that possibly has the most potent 'fear factor' for directors), setting out the actual and likely penalties that may be levied and the defences on which a director can rely.

Furthermore, directors need to know more about the roles of the various regulatory bodies and the extensive enforcement powers of which they can avail themselves and practical guidance on dealing with crisis situations.

Nevertheless, the book gives a good overview of some of the key corporate governance issues and is a good starting point for any director (or other reader) who wants a better understanding of directors' various and far reaching corporate management responsibilities and obligations.

Reena Patel is a solicitor in DLA's regulatory practice.