Business Secretary Vince Cable recently announced an independent review of the UK's equity markets to put an end to a culture 'where we reward failure' and investigate how companies are established and maintained.

The review will be led by economist Professor John Kay, who will release an interim report later this year and his final conclusions in 2012.

Speaking in London last month at the Association of British Insurers’ Biennial Conference, Cable said the review would look at the long-term performance of fund managers, pension advisers, pension funds and companies that handle savings and investments.

While praising the UK's corporate governance framework, he warned: '...the financial crisis has raised justifiable concerns about whether there are systemic flaws in the way companies are owned and managed in the UK, about executives being given incentives to pursue strategies not in the long-term interest of their shareholders, about shareholders allowing takeovers that destroy value, and, at times, it seems like the ultimate owners of the assets were powerless to intervene because of the complexity of the investment chain.'

Cable, who is also president of the Board of Trade, told ABI members: 'This is a pro-business agenda.

'Yes, it is about making executives accountable, but it is also about creating space around businesses leaders so they can make the long-term decisions that are good for business, good for investors and good for the economy.'

Additional, he also revealed government plans to launch a consultation that aimed to make company reports 'clearer and more relevant'.

Cable's comments suggest we can expect more revisions to the UK Corporate Governance Code, which has only recently been reviewed.

And perhaps more importantly, his speech indicates the government has placed changing boardroom behaviour high on its agenda.

So how do we ensure this happens without creating another layer of regulation, red tape, and bureaucracy for what is essentially common sense and good practice?

Moreover, what can we learn from how the UK's largest businesses are managed in order to ensure UK Plc performs collectively as well as it should and executives make decisions that demonstrate they are considering their company's long-term objectives in addition to maximising personal benefits?

These questions are of the utmost importance because they relate directly to our principles and codes of governance, particularly in the current economic environment, which is changing at a rapid rate, so we cannot afford to rest on our laurels.

The situation is similar for shareholders who will want to ensure that executives do not make decisions that benefit themselves in the short-term, but jeopardise their companies in the long-term by allowing the disposal of profitable assets; whether tangible or intangible.

Running your business with a view to considering long- term objectives must surely be a basic business principle.

These are and similar theories are explored in exceptional books such as In Search of Excellence by the infamous Tom Peters gave us key strategic insights into successful companies, and Good to Great by Jim Collins developed the concept.

Nevertheless, organisations can still benefit from additional assistance or guidance from the government on the behaviour of boards.