Corporate governance Contents


153.We fully support the Government’s aim to make Britain one of the best places in the world to invest and do business, and agree that this means having a framework of corporate governance that is seen as setting the gold standard. We also agree with the Prime Minister’s stated aim to improve levels of trust in business and to address the perception that too often big businesses operate without sufficient regard for the communities and environment in which they are based. We have made recommendations in this Report that are evolutionary in spirit, designed to improve further international confidence in UK corporate governance and as a place to invest; to improve public confidence in big business in the UK; and to promote a culture of long-term decision making by UK businesses, in the interests of the full range of stakeholders, including employees.

154.The objectives outlined above are not controversial in themselves. The challenge is to align the interests and incentives of all those in the investment chain to this orientation: that is, executive teams, asset owners, institutional investors, fund managers, advisors and agents. These reforms are not intended to create onerous new requirements, but to establish arrangements to ensure that the better enforcement of the Companies Act 2006, to improve the voice of other stakeholders, including employees, and to require companies to engage in a more open and transparent manner with the public. Their aim is to ingrain permanently the values and behaviours of excellent corporate governance into the culture of British business.

4 April 2017