The University of Southampton

LAWS6130 Corporate Governance - Regulating Boards of Directors

Module Overview

The core focus of corporate governance is on the structure and composition of boards of directors in listed companies in an attempt to address and resolve the agency problem where boards are removed from and difficult to control by shareholders. Much of the UK Corporate Governance Code, which leads the world in this regard, is focused on the structure, role and responsibilities of the board. The Code is ‘soft’ law, but it is clearly evolving into a significant regulatory tool with the framework of hard law regulation of listed companies. Increasing, this ‘soft’ law is reflected in EU Directive requirements for listed companies. This 7.5 ECTS/15 CATS module will focus on board issues, from composition and structure, to tasks and responsibilities, particularly with respect to risk management, strategy, long-termism and sustainability. It looks in particular at the role of the remuneration and audit committees and the consequences for directors in terms of legal constraints (on remuneration) and obligations (in terms of risk management and liabilities to investors and other stakeholders).

Aims and Objectives

Module Aims

• to give you a sound knowledge and understanding of the corporate governance issues surrounding board structures, roles and responsibilities in listed companies; • to enhance your understanding of the effectiveness of the differing legal regulatory devices used in this context, ranging from ‘soft’ law, to domestic statutory requirements and to EU legislative measures; to private mechanisms of investor protection; • to provide you with an understanding of the broader business environment in which boards operate and the role which directors’ legal duties play in reinforcing their obligations with regards to the long-term sustainability of their businesses; • to enable you to develop their powers of legal analysis through a critical examination of the policy objectives of the law in this area and to assess the legal consequences for director when boards fail.

Learning Outcomes

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

  • the UK Corporate Governance Code as it applies to board composition, structure, roles and responsibilities;
  • the role of non-executive directors, especially with regard to risk management and strategy and their contribution to the significant board committees;
  • the legal controls on directors’ remuneration in the form of narrative reporting requirements, binding shareholder votes and advisory votes; and especially the role of the remuneration committee;
  • the legal duties of directors with respect to maintaining and reporting on the company as a going concern – their obligations to give a true and fair view of the company’s position and their potential liabilities to;
  • the role of the audit committee and the evolving triangular relationship of board, auditors and audit committee.
Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

  • analyse legal materials, identify key legal principles and issues and, where appropriate, make constructive criticism;
  • critically evaluate legal materials by way of textual and case analysis, review of journal articles and consideration of reform reports from bodies such as the European Commission and the UK Government;
  • critically assesses the strengths and weakness of corporate governance developments in the wake of the financial crisis and the steps taken to strengthen boards of directors;
  • communicate effectively knowledge of issues of governance structures and issues in the traded company and present reasoned arguments coherently.
Transferable and Generic Skills

Having successfully completed this module you will be able to:

  • analyse and interpret complex legal materials, including soft law materials;
  • analyse and interpret complex case material;
  • evaluate legal materials and effectively apply them to practical corporate problems;
  • develop and present written arguments supported by appropriate evidence;
  • participate in oral discussions and present arguments coherently.


The syllabus will focus upon (listed companies only): • The role of corporate governance codes, soft versus hard law, UK initiatives within an EU legislative framework; • Issues surround board composition – the role of executive and non-executive directors; the duties of a company chairman; managing conflicts of interest and maintaining independence; gender balance issues; unitary and two-tier board; board committees; • Managing strategy and risk – long-termism and sustainability of the entity – going concern issues and directors’ duties to give a true and fair view of the company’s position – legal liabilities to investors for negligence and deceitful accounts and prospectuses; • The Remuneration Committee – legal constraints on directors’ remuneration – narrative reporting as a regulatory tool – contractual constrains via binding shareholder votes on remuneration policy – issues on devising a remuneration policy – consequences of void payments – shareholder controls; • The Audit Committee –the role of the committee and the evolving triangular relationship of auditors, committee and board.

Learning and Teaching

Teaching and learning methods

Teaching methods include • Weekly seminars, led by individual student presentations with opportunities for group presentations (the balance between individual and group presentations will depend on the number of students in the module). Learning activities include • Directed reading, as per distributed reading lists; • Additional reading as provided on Blackboard lists • Engagement with daily business reports in news media, whether online or in newspapers, to ensure the students can relate the materials being discussed to every day issues in the management of large companies.

Independent Study130
Total study time150

Resources & Reading list

Davies et al (2013). Corporate Boards in Law and Practice. 

Kraakman, et al (2009). The Anatomy of Corporate Law. 

Davies (2010). Introduction to Company Law. 



Class discussions


MethodPercentage contribution
Examination  (1.5 hours) 100%


MethodPercentage contribution
Examination  (1.5 hours) 100%


MethodPercentage contribution
Examination  (1.5 hours) 100%

Repeat Information

Repeat type: Internal & External


Costs associated with this module

Students are responsible for meeting the cost of essential textbooks, and of producing such essays, assignments, laboratory reports and dissertations as are required to fulfil the academic requirements for each programme of study.

In addition to this, students registered for this module typically also have to pay for:

Printing and Photocopying Costs

Students are able to assess the materials on Blackboard but may incur some printing costs because they will need to have copies of some documents, such as the UK Corporate Governance Code for individual study.


Recommended texts for this module may be available in limited supply in the University Library and students may wish to purchase the mandatory/additional reading text as appropriate.

Please also ensure you read the section on additional costs in the University’s Fees, Charges and Expenses Regulations in the University Calendar available at

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