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UK Government Department for Business, Energy and Industrial Strategy
This is an important task, and one where both the government and big business must rise to the challenge of restoring faith in what they do, and in the power of the market economy to deliver growth, opportunity and choice for all.
The paper looks for views on:
Contributions from everyone are invited, particularly from employees, those who contribute to business activity, and from consumers, shareholders and communities, those who are affected by business, as well as from current and future business leaders.
ACCA response
Commenting on the government’s green paper on corporate governance, Jo Iwasaki, head of corporate governance at ACCA said:
“The UK Government needs to meet public expectations on boardroom accountability without putting the brakes on UK competitiveness. The publication of this Green Paper provides an important opportunity to evaluate the current corporate governance framework and see what remains fit for purpose.
“In particular, proposals intended to encourage greater shareholder activism are to be welcomed provided these can be introduced in a balanced and proportionate way.
“The proposed adoption of the UK governance framework by private companies is an interesting initiative which should help encourage best practice. Ultimately however, the focus should be on a framework that serves the need of investors.
“Today marks the start of a conversation between UK plc. and its many beneficial owners. We will be encouraging wide ranging debate on these important issues.”
Over the next 12 months, ACCA will be undertaking global research into the tenets of good corporate governance to inform the debate.
FRC response
FRC needs to ensure that high standards of governance continue to support investment. Companies also need to fulfil their responsibilities to a wider range of stakeholders and society. The FRC will consult to update the UK Corporate Governance Code and associated guidance in 2017 to address these issues.
FRC has already made recommendations to the BEIS Select Committee corporate governance inquiry. These include company directors reporting on their responsibilities under section 172 of the Companies Act 2006, developing the role of the remuneration committee and what happens when there are significant votes against the remuneration report, and ensuring that boards take account of a more diverse range of views in their decision-making. The FRC stands ready to develop and implement these proposals to help support a strong economy and meet the needs of wider society.
Commercial Risk Europe response
The UK government is seeking views on how to improve corporate governance and is considering extending its current standards and regime for public firms to large privately owned companies. It also wants to tackle excessive executive pay and strengthen the connection between boards and their employees.
A consultation on boosting corporate governance was announced in a green paper by the UK's Department for Business, Energy & Industrial Strategy.
The government said the green paper is designed to frame discussions on potential changes and ascertain whether any are needed. It also stressed that if corporate governance changes are deemed appropriate they could be achieved through industry standards rather than legislation.