Corporate Governance Reform?

August 2017 – The Government has published a response on corporate governance reform having watered it down following considerable pressure from those who would be affected by the original proposals.

The original proposals announced by Theresa May in her inaugural speech included reining in corporate greed and shareholder/member and employee representatives on company boards and were presented in a Green Paper for public consultation.  The Green Paper went down like a lead balloon with building society directors.

The proposals were watered down (twice) as a result of considerable pressure from business groups, which shows who runs the country. The end result is that there is little substance and only is water left. It will be business as usual for building society fat cats.

Many business organisations wholeheartedly support the need for reforms. However, needless to say the building societies industry (with the exception of the Ecology – see below) strongly opposed reform. The BSA stated that societies do not need any reform because they are so accountable, so democratic, so mutual and so trusted.   They claimed that “Talkback” sessions and members’ panels and such like were sufficient.  None of which has anything to do with governance and, of course, they do not mention the infamous “Quick Vote” or any of the anti-member actions and there is no greed in the boardrooms – is there?

The BSA website states “As well as proactively campaigning, the BSA frequently comments on consultative papers issued by the Financial Conduct Authority and Prudential Regulation Authority, and by Government departments such as the Treasury or the Department for Business, Innovation and Skills.”

The press release from the Department for Business, Energy & Industrial Strategy claims the outcome as “World-leading package of corporate governance reforms to increase boardroom accountability and enhance trust in business”!

BEIS Press Release

The Government response to the green paper consultation