HMT white paper on financial markets

Downloadable here. There's some discussion of governance in there:

Corporate governance
3.4 In well-functioning businesses the self-interest of different stakeholders imposes discipline to avoid excessive risk-taking without commensurate compensation. However, recent experience has shown that market discipline has failed to prevent a number of deficiencies in corporate governance in the institutional investment chain. Firms’ senior management must carry primary responsibility for their actions and resulting consequences. Large investors also have a responsibility to reward institutions which are following prudent and profitable long-term business strategies and to punish those with excessive risk and inadequate business models.

3.5 There were failures of senior management to question higher returns robustly and to take into account the risk of low-probability but high-impact events materialising. There were also widespread failures of governance by some bank boards in several areas, including:
• understanding and probing overall risk-management reporting;
• understanding how affiliated vehicles imply ongoing exposure; and
• how remuneration policies encourage risk-taking that may prioritise the short term at the expense of the long term.

3.6 Similarly, there were failures on the part of some owners, in the form of institutional shareholders, to recognise the extent of these deficiencies and to constrain their agents’ actions through effective monitoring of and engagement with bank boards.