A knight or damehood might seem like a quaintly medieval way of rewarding a career in business, the military or charity sectors. Yet the U.K.'s honors system is often criticized for being a relic of the British colonial era – and for rewarding people who may not have served the country particularly well.
On New Year's Eve, as part of the annual New Year Honours, it was announced that Paul Tucker - who missed out on the Governor of the Bank of England position to Mark Carney - will be knighted. Ian Cheshire, chief executive of retailer Kingfisher, will also receive the honor, and Alison Carnwath, chairman of U.K. property company Land Securities, will become a dame.
This year's list was also notable for being the first where more women received awards than men.
Other business figures to get lesser honors include Karren Brady, vice-chairman of West Ham football club, and Jayne-Anne Gadhia, chief executive of Virgin Money, who were both made Commander of the British Empire (CBE), an award often seen as the prelude to a knight or damehood.
But the system has proved controversial and a number of big names have been stripped of their awards in the past.
Former Royal Bank of Scotland CEO Fred Goodwin was famously stripped of his knighthood in 2012, after the ignoble performance of the bank, which was nationalized under his stewardship. Former HBOS CEO James Crosby also had his knighthood removed following a critical report by the U.K.'s Banking Standards Commission.
(Read more: Why Greenspan should be stripped of his knighthood)
There have also been criticisms that the system has become too star-struck, with celebrities given higher awards than charity campaigners.
Peter Tatchell, a well-known U.K. human rights campaigner and director of the Peter Tatchell Foundation, told CNBC the titles are "a throwback to the medieval epoch."
"They are anachronistic and out of touch with modern-day Britain. Most of the tireless, local community volunteers tend to get the lower-order honors, while senior establishment figures are more likely to get the highest awards," he said.
Even the U.K. government's public administration committee has called for a review of the system, accusing the government of "lack of willingness to clarify and open up the process."
(Read more: Bank chief asks to be stripped of knighthood)
Earlier this year, Douglas Carswell, an MP for the ruling Conservative Party, described the honors as "baubles" and warned "a knighthood is becoming almost as debased a currency as the British pound."
Although the Queen presents the awards, she does not decide who makes the honors list. Names are suggested by senior civil servants and a selection committee, and the list is presented to the Queen by the British Prime Minister.
People who have famously turned down the awards include authors Roald Dahl, J G Ballard and C.S. Lewis. Painters Lucian Freud and Francis Bacon, physicist Paul Dirac and DNA pioneer Francis Crick have also rejected the honors.