Companies in the UK, like their American counterparts, are considering reductions in the size of their boards as a cost cutting measure. Disclosures in the listings of the Financial Services Authority in the United Kingdom, indicate that not only are firms engaging in this for purely economic considerations but are also reducing the size of their boards as a means of operating more nimbly. The Combined Code on Corporate Governance sets out that boards should not be so large as to be “unwieldy,” while firms aim to comply with these corporate governance standards they must assess whether the effectiveness of the board is compromised by its size. For a discussion of the reductions in board sizes of U.S. companies please see, Incredibly Shrinking Boards: Can Governance Get Cut?

Published: March 5, 2009