December 2017 – The Financial Reporting Council (FRC) has produced a consultation document on proposals for revisions to the Corporate Governance Code.
This follows on from the Governments Green Paper review on corporate governance which was instigated as a response to the increasing numbers of shareholder revolts particularly on pay. However the outcome of the review was considerably water down.
The FRC states it is intended to achieve long-term success and trust in business and
- Establish a company’s purpose, strategy and values and satisfy themselves that these and their culture are aligned;
- Undertake effective engagement with wider stakeholders, to improve trust and achieve mutual benefit, and to have regard to wider society;
- Gather views of the workforce;
- Ensure appointments to boards and succession plans are based on merit and objective criteria to avoid group think, and promote diversity of gender, social and ethnic backgrounds, cognitive and personal strengths;
- Be more specific about actions when they encounter significant shareholder opposition on any resolution, including those on executive pay policies and awards; and
- Give remuneration committees broader responsibility and discretion for overseeing how remuneration and workforce policies align with strategic objectives.
Building Societies are required to abide by their own version of the Code but these proposals and this consultation are still applicable to building societies.
Click here for the consultation document
Responses to the consultation should be sent to codereview@frc.org.uk by 28 February 2018.