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Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

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Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

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Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

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Expert led content

+1,000 expert presented, on-demand video modules

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Keep track of learning progress with our comprehensive data

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Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

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Key Governance Factors in ESG Investing

Key Governance Factors in ESG Investing

Arun Kelshiker

20 years: Asset management and stewardship

In this video, Arun explores the fundamental role of governance in shaping company operations and driving ethical conduct and business performance. He also talks about the evolution of corporate governance, influenced by past financial scandals and corrective measures, leading to the establishment of governance codes like the UK's 1992 Corporate Governance Code.

In this video, Arun explores the fundamental role of governance in shaping company operations and driving ethical conduct and business performance. He also talks about the evolution of corporate governance, influenced by past financial scandals and corrective measures, leading to the establishment of governance codes like the UK's 1992 Corporate Governance Code.

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Key Governance Factors in ESG Investing

13 mins 12 secs

Overview

Governance underpins company operations, focusing on aligning processes and people. Its essence is promoting ethical behavior and robust business performance. Key governance factors include board structure, executive pay, transparency, and business ethics. Boards, essential in oversight, face scrutiny from investors. Following financial mishaps, measures like the UK's 1992 Corporate Governance Code emerged, albeit with global variations. These frameworks aim to address challenges such as the 'agency issue'. Emphasising the board's structure, executive compensation, and business ethics ensures stakeholder trust and value while navigating complex corporate landscapes.

Key learning objectives:

  • Outline what governance is

  • Understand how corporate governance has evolved over time

  • Outline the key governance factors investors should consider when making investment decisions

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Summary
What is governance?
Governance is the managerial and supervisory framework dictating how companies function. It is fundamentally the interplay between people and processes, aiming to nurture a culture that drives strong business performance, minimises risks, and ensures ethical conduct. Board members are central to this, responsible for a company's oversight, especially in larger and more complex entities. Effective governance serves as a foundation, transforming policies and codes of conduct into real-world practice, setting the stage for a company's growth and aligning with stakeholder prosperity.

How has corporate governance evolved over time?
Corporate governance's evolution has been shaped by financial scandals and subsequent corrective measures. The establishment of the Cadbury Committee in 1991 after financial scandals in the UK culminated in the 1992 Corporate Governance Code, setting guidelines for transparency and responsibility in director roles and power divisions. Today, while most countries have their governance codes reflecting local history and culture, the primary aim remains: fostering responsible and transparent corporate management. Periodic financial scandals have led to reforms, underscoring the ever-evolving nature of corporate governance.

What are the key governance factors investors should consider when making investment decisions?
Investors should focus on several governance factors. The board's structure, with an emphasis on its diversity, effectiveness, and independence, is pivotal for sound decision-making. Executive remuneration, encompassing salaries, benefits, bonuses, and share incentives, often ties to KPIs, especially those incorporating ESG criteria, requiring close scrutiny. Adherence to standards like the UK’s 2018 Corporate Governance Code ensures that reporting is transparent and balanced. Financial integrity and capital allocation decisions are also critical, as they can influence shareholder sentiments. Lastly, a company's business ethics, spanning employee treatment to community relations, reveal its moral standing and potential for sustainable success.

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Arun Kelshiker

Arun Kelshiker

Arun Kelshiker was formerly the Head of Asset Allocation and Portfolio Strategy at Standard Chartered Bank and part of the bank's Global Investment Committee, where he provided investment advisory and multi-asset portfolio solutions. His focus is now with Cambridge Sustainable Investment Partners, which draws its expertise from the Resilience and Sustainable Development Centre at Cambridge University. He is also a university lecturer at the Frankfurt School of Finance and Management and is Vice Chair of the CFA UK's Inclusion and Diversity Committee and its Investment Committee.

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