Tag Archives for " Corporate Governance Code "

The Wates Corporate Governance Principles

As 2018 comes to an end, the FRC publishes the finalised Wates Corporate Governance Principles for Large Private Companies. The last piece in a series of major changes to UK corporate governance that will come into effect from 1 January 2019.


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Wates Corporate Governance Principles

The Financial Reporting Council (FRC) has published a consultation on corporate governance for large private companies.

Chaired by James Wates, chairman of The Wates Group, the Wates Corporate Governance Principles consultation document encourages large private companies to follow six principles to inform and develop their corporate governance practices and adopt them on an ‘apply and explain’ basis:

  • Purpose – An effective board promotes the purpose of a company and ensures that its values, strategy and culture align with that purpose.
  • Composition – Effective board composition requires an effective chair and a balance of skills, backgrounds, experience and knowledge, with individual directors having sufficient capacity to make a valuable contribution. The size of a board should be guided by the scale and complexity of the company.
  • Responsibilities – A board should have a clear understanding of its accountability and terms of reference. Its policies and procedures should support effective decision-making and independent challenge.
  • Opportunity and Risk – A board should promote the long-term success of the company by identifying opportunities to create and preserve value and establish oversight for the identification and mitigation of risk.
  • Remuneration – A board should promote executive remuneration structures aligned to sustainable long-term success of a company, taking into account pay and conditions elsewhere in the company.
  • Stakeholders – A board has a responsibility to oversee meaningful engagement with material stakeholders, including the workforce, and have regard to that discussion when taking decisions. The board has a responsibility to foster good relationships based on the company’s purpose.

James Wates commented, “These principles will provide a flexible tool for companies of all sizes, not just those captured by the new legislative reporting requirement, to understand good practice in corporate governance and, crucially, adopt that good practice widely. The principles are about fundamental aspects of business leadership and performance.

The consultation is open until 7 September 2018.


Singapore to review code of corporate governance

SINGAPORE — The Monetary Authority of Singapore (MAS) has formed a corporate governance council to review the code of corporate governance. The council will look at improving the quality of companies’ disclosure of their corporate governance practices and explanations for deviations from the corporate governance code, as well as propose mechanisms to monitor the progress made by listed companies in strengthening their corporate governance practices.

The last review of the corporate governance code was in 2012, when changes were introduced to strengthen board independence and enhance remuneration practices and disclosures.

 “Corporate governance practices globally have continued to evolve since then, and a review of the corporate governance code and practices is thus timely to ensure that they continue to support sustained corporate performance and maintain investor confidence in Singapore’s capital markets,” said the MAS in a statement.

Last year, postal and logistics services provider Singapore Post came under scrutiny when it emerged that then board member Keith Tay was a shareholder and chairman of the financial adviser to three freight forwarders the postal-services provider bought in 2013, 2014 and 2015.

Mr Tay subsequently resigned from his post as SingPost’s lead independent director following the release of a special audit report, amid a leadership crisis at SingPost which saw the resignation of the chief executive officer and the chief operating officer, among others.

Mr Chew Choon Seng, former chairman of the Singapore Exchange, will chair the corporate governance council whose members are drawn from various stakeholder groups. They include Mr Willie Cheng, chairman of the Singapore Institute of Directors; Mr Hsieh Fu Hua, chairman of United Overseas Bank; Ms Leong Wai Leng, chief financial officer of Temasek Holdings; Mr Douglas Foo, chairman of Sakae Sushi, and Mr Mak Yuen Teen, associate professor of accounting at National University of Singapore.

Representatives from the MAS, the Accounting and Corporate Regulatory Authority and Singapore Exchange will also be appointed to the council.

Said Mr Chew: “With market participants paying greater attention to the corporate governance practices of listed companies, companies are now under increasing pressure to become more transparent and accountable to their stakeholders. It is important for our listed companies to go beyond mere box-ticking and boiler-plate explanations.

“They must be able to engage meaningfully with their stakeholders and implement (corporate governance) practices that lead to long-term sustainable business performance.”

The council will consult the public on its recommendations, including changes to the corporate governance code, before finalising them.

FRC announces a fundamental review of the UK Corporate Governance Code

The Financial Reporting Council (FRC) has announced plans for a fundamental review of the UK Corporate Governance Code.

This will take account of work done by the FRC on corporate culture and succession planning, and the issues raised in the Government’s Green Paper and the BEIS Select Committee inquiry.

The review will build on the Codes globally recognised strengths developed over the past 25 years while considering the appropriate balance between its principles and provisions and the growing demands on the corporate governance framework

To guide this review, the FRC will seek input from a wide range of stakeholders including its recently established Stakeholder Advisory Panel of high profile representatives from a wide variety of sectors.
In its response to the Government’s Green Paper on Corporate Governance Reform the FRC will highlight the importance of helping boards take better account of stakeholder views, linking executive remuneration with performance, and extending the FRC’s enforcement powers to ensure that disciplinary action can be taken against all directors where there have been financial reporting breaches.

Any changes to the regulatory frameworks and to the Code will be done carefully and through full consultation with a wide range of stakeholders.

The FRC will start a consultation on its proposals later in 2017, based on the outcome of the review and the Government’s response to its Green Paper.