Corporate Governance UK – Dedicated to improving Corporate Governance for all UK businesses

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Dedicated to improving Corporate Governance for all UK businesses

July 25, 2021

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The latest Corporate Governance News

English Touring Theatre – Trustee

By Debbie Wright Trustee - English Touring Theatre The closing date has changed from 2nd August to 9th August Business ...
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Westfield Health – Non-Executive Director (Audit Committee)

By Debbie Wright Non-Executive Director (Audit Committee) - Westfield Health Recruiter: Westfield Health Location: Homeworking Salary: Negotiable Posted: 12 Jul ...
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Emmerson appoints Rupert Joy to its Board as Non-Executive Director

By Debbie Wright July 12, 2021 by Olivier Dellacherie - Talent4Boards – ISLE OF MAN, Douglas –  Emmerson Plc (LON: EML), the Moroccan-focused potash ...
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Advanced Research and Invention Agency (ARIA) – Chair

By Debbie Wright Chair - Advanced Research and Invention Agency (ARIA) Job Reference: QAPASA Closing Date: Monday 02 Aug 2021 ...
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IG Group welcomes Susan Skerrit to its Board as Non-Executive Director

By Debbie Wright July 9, 2021 by Olivier Dellacherie - Talent4Boards – UK, London –  IG Group Holdings plc (LON: IGG), a global leader ...
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Press release: Serviceman gambled £41,000 borrowed from concerned friends

By HM Government A former RAF serviceman who took more than £41,000 from his friends to fund his gambling habit ...
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Business Enterprise Fund – Non-Executive Director

By Debbie Wright Non-Executive Director - Business Enterprise Fund Recruiter: Business Enterprise Fund Location: West Yorkshire (GB) Salary: £4,000 PA ...
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Performing Right Society Limited (PRS) – Independent Non-Executive Director

By Debbie Wright Independent Non-Executive Director - Performing Right Society Limited (PRS) Recruiter: Performing Right Society Limited (PRS) Location: London ...
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Newcastle Building Society appoints James Ramsbotham to its Board of Directors as next Chairman

By Debbie Wright July 5, 2021 by Olivier Dellacherie - Talent4Boards – UK, Wallsend –  Newcastle Building Society (LON: NBSR) today announced the appointment ...
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Press release: Yorkshire builder sentenced for breaching bankruptcy terms

By HM Government Builder given 12 months community order and ordered to do 150 hours of unpaid work after acting ...
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Summary
Corporate Governance UK
Article Name
Corporate Governance UK
Description
The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company
Author

Corporate Governance UK

Corporate Governance UK

Definition

“Corporate governance is the system by which businesses are directed and controlled.”
(Cadbury Report, UK)
 
“Corporate governance is one key element in improving economic efficiency and growth as well as enhancing investor confidence. Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring.”
(OECD Principles, 2004, Preamble)
 
“The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of the company.”
(UK Corporate Governance Code)

Why is Corporate Governance important?

“The country’s economy depends on the drive and efficiency of its companies. Thus, the effectiveness with which their boards discharge their responsibilities determines Britain’s competitive position”
(Cadbury)

UK Corporate Governance Code

The UK Corporate Governance Code (formerly the Combined Code) sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders.

All companies with a Premium Listing of equity shares in the UK are required under the Listing Rules to report on how they have applied the Code in their annual report and accounts. The relevant section of the Listing Rules can be found at: https://fsahandbook.info/FSA/html/handbook/LR/9/8.

The Code contains broad principles and more specific provisions. Listed companies are required to report on how they have applied the main principles of the Code, and either to confirm that they have complied with the Code’s provisions or – where they have not – to provide an explanation. Some of the provisions of the Code require disclosures to be made in order to comply with them. These are summarised in Schedule B to the Code.

The new edition of the Code was published in September 2012 and applies to reporting periods beginning on or 1 October 2012.

Companies reporting on reporting periods beginning before 1 October 2012 should continue to report against the June 2010 edition of the Code, although they are encouraged to consider whether it would be beneficial to adopt some or all of the new provisions in the revised code earlier than formally expected.

The FRC also publishes guidance to boards and board committees to assist them in considering how to apply the Code to their particular circumstances. There are different pieces of guidance addressing board effectiveness, the role of the audit committee, risk management and internal control and going concern and financial reporting.

The Code and guidance can be downloaded from the FRC website. Printed copies can be obtained free of charge from FRC publications, tel: 020 8247 1264, email: customer.services@cch.co.uk and online at: www.frcpublications.com.

A UK Corporate Governance Code that is fit for the future

16 July 2018

Today the FRC has released the 2018 UK Corporate Governance Code which puts the relationships between companies, shareholders and stakeholders at the heart of long-term sustainable growth in the UK economy. The new shorter, sharper Code is the product of extensive consultation.

This Code places emphasis on businesses building trust by forging strong relationships with key stakeholders. It calls for companies to establish a corporate culture that is aligned with the company purpose, business strategy, promotes integrity and values diversity.

There is a renewed focus on the application of the Principles – the FRC wishes to see clear, meaningful reporting. Investors and proxy advisors must assess explanations carefully and not take a tick-box approach.

The main changes include:

  • Workforce and stakeholders: There is a new Provision to enable greater board engagement with the workforce to understand their views. The Code asks boards to describe how they have considered the interests of stakeholders when performing their duty under Section 172 of the 2006 Companies Act.
  • Culture: Boards are asked to create a culture which aligns company values with strategy and to assess how they preserve value over the long-term.
  • Succession and diversity: To ensure that the boards have the right mix of skills and experience, constructive challenge and to promote diversity, the new Code emphasises the need to refresh boards and undertake succession planning. Boards should consider the length of term that chairs remain in post beyond nine years. The new Code strengthens the role of the nomination committee on succession planning and establishing a diverse board. It identifies the importance of external board evaluation for all companies. Nomination committee reports should include details of the contact the external board evaluator has had with the board and individual directors.
  • Remuneration: To address public concern over executive remuneration, the new Code emphasises that remuneration committees should take into account workforce remuneration and related policies when setting director remuneration. Importantly formulaic calculations of performance-related pay should be rejected. Remuneration committees should apply discretion when the resulting outcome is not justified.

Sir Win Bischoff, Chairman, FRC, said:

“Corporate governance in the UK is globally respected and is a framework trusted by investors when deciding where to allocate capital. To make sure the UK moves with the times, the new Code considers economic and social issues and will help to guide the long-term success of UK businesses.
This new Code, in its new shorter and sharper form, and with its overarching theme of trust, is paramount in promoting transparency and integrity in business for society as a whole.”

Business Secretary Greg Clark said:

“Britain has a good reputation internationally for being a dependable place to do business, based on required high standards. It is right that we keep under review and update our corporate governance code to ensure the highest standards.

“That is why I supported the FRC in deciding to update their Corporate Governance Code, and I am pleased to see the revised Code.

“These changes will drive improvements in how boardrooms engage with employees, customers and suppliers as well as shareholders, delivering better business performance and public confidence in the way businesses are run.   They will help the UK remain the best place in the world to work, invest and do business.”

Opinion

Recent articles about Corporate Governance

What makes a good NHS Non-Executive Director?

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What skills do Non-Executive Directors need?

Use this checklist to see if you have the skills Non-Executive Directors need to be effective Regardless of any specialist ...
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How to write a Non-Executive Director CV

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10 things Non-Executive Directors can do to satisfy their legal responsibilities

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Working with the board in the 21st century

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The UK Corporate Governance Code 2014 Update

The Financial Reporting Council (FRC) has issued an updated version of the UK Corporate Governance Code (the Code) The latest ...
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board

Is your board dysfunctional?

Does your board have directors who trust each other, are committed, are comfortable with conflict, hold each other to account ...
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company directors

Exactly what should company directors do?

For the first time in law, the 2006 UK Companies Act sets out what a company directors duties are The ...
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Exactly what should directors do?

For the first time in law, the 2006 UK Companies Act sets out what a company directors duties are The ...
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Books

Books on Corporate Governance

Risk Management and Financial Institutions

The most complete, up to date guide to risk management in finance Risk Management and Financial Institutions explains all aspects ...
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Corporate Governance: Mechanisms and Systems

This exciting new text provides a complete introduction to Corporate Governance. It deals with the control and direction of companies ...
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Takeovers, Restructuring, and Corporate Governance (5th Edition)

For undergraduate and graduate courses on Mergers and Acquisitions, or as a supplement for Business or Corporate Finance, Economics, or ...
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Performance Measurement in Corporate Governance: DEA Modelling and Implications for Organisational Behaviour and Supply Chain Management (Contributions to Management Science)

In the global knowledge economy, corporate governance, organisational behaviour and performance of the supply chain are becoming increasingly important aspects ...
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Corporate Governance: Theory and Practice

Recent financial crises and instances of corporate malpractice have prompted many questions about how companies are run - and whether ...
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Corporate Governance and Accountability

Presents a full discussion of corporate governance issues, adopting a holistic approach. Comprehensively updated and incorporates new codes of practice, ...
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Corporate Governance: Principles, Policies and Practices

Taking an international perspective, Bob Tricker examines different models and theories of corporate governance and applies them in a real ...
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Corporate Governance

Building on the success of the last three editions, this textbook provides both undergraduate and postgraduate students with an accessible ...
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Business Strategy and Corporate Governance in the Chinese Consumer Electronics Sector (Chandos Asian Studies: Contemporary Issues and Trends)

Summary: This book analyzes how China's firms in the consumer electronics (CE) sector have developed their business strategy and corporate ...
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