Corporate Governance - The FRC’s proposals
27th February 2017
Following on from the article we published on 14 February 2017, the Financial Reporting Council (“FRC”) has provided its response to the Green Paper on Corporate Governance Reforms.
It appears that the interests of stakeholders, executive remuneration, the accountability of large private companies and effective enforcement are key themes in the FRC’s response.
The FRC has proposed reform in the following four key areas:
- The interests of major stakeholders. The Companies Act 2006 places a duty on directors of all companies to promote the success of the company, and in so doing to have regard to a range of factors, such as long-term consequences, the environment, employees, suppliers and customers. The FRC believes that this duty must be reinvigorated and that companies should be required to report more effectively on how they have discharged such duties.
- Executive remuneration. The FRC believes that the role and remit of the remuneration committee should be extended to cover pay policies throughout the organisation. The FRC goes on to state that remuneration policies and payments should have a much clearer link to the delivery of strategy with the aim to deliver long-term company performance.
- Large private companies. The FRC proposes large private companies should be more accountable to their stakeholders given their significance to the public interest and the privilege and benefits of limited liability status. Apparently the FRC supports the introduction of corporate governance principles for such companies and associated reporting.
- Effective enforcement of the law. The FRC believes that the regulatory framework is fragmented, with gaps in enforcement action. The FRC states that it proposes extending its powers to investigate and prosecute all directors for financial reporting breaches and associated issues of integrity.
For further information please contact Howard White, Associate in our Corporate and Commercial team.
(Source: press release: FRC responds to Green Paper on corporate governance reforms)
Keeping Staff in a Photograph
Thursday 18th October 2018
Sophie Banks considers the use of employee images for marketing purposes under the GDPR and DPA 2018, and what steps an employer should take to prevent complaints of unlawful processing of data in this situation.
Business Update Autumn 2018
Tuesday 9th October 2018
Within this edition of Mundays Business update you will find legal articles that we hope you will find useful and help you understand when you might need to seek legal advice.
Business card etiquette under the GDPR
Friday 5th October 2018
Fiona Moss examines the approach to exchanging business cards under the EU General Data Protection Regulation (GDPR)