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| Levene Review | |
|---|---|
| Name | Levene Review |
| Author | Sir Andrew Levene |
| Published | 2015 |
| Commission | Independent Review Panel |
| Subject | Corporate governance; financial regulation |
Levene Review The Levene Review was an independent inquiry into corporate governance and institutional accountability commissioned in 2014 and published in 2015. The Review evaluated governance arrangements across major Financial Services Authority-regulated firms, Bank of England-supervised institutions, and public bodies such as the British Broadcasting Corporation and National Health Service, proposing reforms to roles, responsibilities, and oversight. Its recommendations influenced policy debates in Parliament of the United Kingdom, regulatory practice at the Prudential Regulation Authority, and reforms considered by the European Commission and international bodies like the Financial Stability Board.
The Review was commissioned by the Prime Minister of the United Kingdom following high-profile failures involving firms such as Royal Bank of Scotland, HBOS, and Barclays PLC. The panel was chaired by Sir Andrew Levene and included experts drawn from institutions like Institute of Directors, London School of Economics, and Clifford Chance. The remit was set jointly by the Treasury (United Kingdom) and the Department for Business, Innovation and Skills, with stakeholder engagement spanning the Confederation of British Industry, Trades Union Congress, and supervisory agencies including the Financial Conduct Authority and European Banking Authority.
The Review examined governance practices across listed entities including BP, GlaxoSmithKline, Tesco, and multinational banks such as HSBC Holdings and Lloyds Banking Group. Methodology combined document analysis of corporate codes like the UK Corporate Governance Code, comparative review of international frameworks including the Sarbanes–Oxley Act and the Dodd–Frank Wall Street Reform and Consumer Protection Act, and empirical interviews with directors from firms such as AstraZeneca, Unilever, and Rolls-Royce Holdings. It drew on case studies of corporate failures—Enron, Lehman Brothers, and Barclays Libor scandal—and considered precedents from inquiries like the Turner Review and the Higgs Review.
The Review found systemic weaknesses in board responsibility at firms analogous to failures at RBS Group and HBOS plc, highlighting deficient non-executive oversight at companies such as Carillion and BHS. Recommendations included clearer statutory duties for chairs and chief executives modeled on obligations in the Companies Act 2006, mandatory separation of chair and CEO in systemically important institutions comparable to guidance from the Basel Committee on Banking Supervision, and enhanced role for senior non-executives akin to practices at Novo Nordisk and Siemens. It advocated for strengthened whistleblowing protections reflecting provisions in the Public Interest Disclosure Act 1998 and proposed an independent appointment body with membership drawn from organizations like the Institute of Chartered Accountants in England and Wales and the British Chambers of Commerce.
The Review was welcomed by stakeholders including the City of London Corporation and Financial Reporting Council for clarifying director duties, and supported in part by trade bodies such as the Law Society of England and Wales. Critics—ranging from commentators at The Financial Times and The Economist to unions like Unite the Union—argued it underplayed structural incentives associated with market pressures exemplified by episodes involving Glencore and Sainsbury's. Academic responses from scholars at University of Oxford, University of Cambridge, and London Business School questioned the empirical basis for recommended prescriptive governance rules, citing comparative studies involving Germany and Japan.
Elements of the Review informed policy adjustments in the UK Corporate Governance Code and guidance issued by the Financial Conduct Authority and the Prudential Regulation Authority. Several listed firms including Barclays PLC and Standard Chartered adopted board changes echoing the Review’s prescriptions; institutional investors such as BlackRock, Legal & General Group and Aviva Investors endorsed stronger director accountability in stewardship codes. Internationally, aspects of the Report entered dialogue at the Organisation for Economic Co-operation and Development and cross-border supervisory coordination at the International Monetary Fund and Bank for International Settlements.
Legal challenges arose around proposals touching statutory duties and appointment processes, prompting litigation threats from corporate groups represented by law firms such as Freshfields Bruckhaus Deringer and Linklaters. Debates in the Supreme Court of the United Kingdom and submissions to select committees in the House of Commons scrutinized compatibility with existing statutes like the Companies Act 2006 and EU directives including the Shareholder Rights Directive. The Review’s recommendations on whistleblower protections were contested in employment tribunals and prompted regulatory consultations involving the Equality and Human Rights Commission.
Category:Reports