The following Corporate guidance note provides comprehensive and up to date legal information covering:
This Practice Note considers the UK Corporate Governance Code (UKCG Code) requirements for boards to engage with, and have regard to the interests of, the workforce and other stakeholders, and how these overlap with the directors’ statutory duties under the Companies Act 2006 (CA 2006). It considers different ways that boards may gather the views of the workforce and other stakeholders and how companies should report on this engagement in the annual report and other communications.
In July 2016 the FRC published a report on corporate culture (FRC Culture Report), which explored the effect that organisational culture has on a company’s governance. One of the report’s findings was the importance of companies engaging with and reporting to their stakeholders as part of a good governance strategy.
Improved engagement and reporting to stakeholders was also a theme explored in the government’s response to its green paper on corporate governance reform in August 2017. Among the package of reforms announced were proposals to:
introduce secondary legislation to require public and private companies of significant size to explain how their directors comply with the requirements of CA 2006, s 172 to have regard to employee and other interests when fulfilling the duty to promote the success of the company
invite the FRC to consult on the development of a new UKCG Code principle
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