ABSTRACT
Fusion of share transactions behaviour with analyses of government archives allows us to examine corporate governance in its appropriate political climate. In the UK, the propensity to have a small number of internally appointed non-executive directors has diminished the effectiveness of this mechanism of corporate governance. The influence of public policy on corporate governance in the UK, therefore, has been either to prompt the exercise of limited exit or to dissuade certain institutions from exit or limited exit. The standard view on the internal mechanisms of corporate governance in this country is that they fail because non-executive directors have limited powers and high incentives not to press the executive directors for change. A take-over had been instigated, corporate governance had engineered a transfer of ownership and the ‘City’ had protected its interests through a loss minimising strategy which obviated it from responsibility for direct intervention.
