The Financial Reporting Council (FRC) has published a revised Corporate Governance Code, which ‘emphasises the importance of positive relationships between companies, shareholders and stakeholders’.
The new Code states that relationships between companies, shareholders and stakeholders are ‘at the heart’ of long-term growth in the UK economy, and beseeches businesses to ‘create a culture which aligns company values with strategy’.
A number of changes have been made to the Code, including a new provision to promote board engagement with the workforce in order to understand employees’ views, and an emphasis on the need to refresh boards and carry out succession planning.
‘To make sure the UK moves with the times, the new Code considers economic and social issues, and will help to guide the long-term success of UK businesses,’ said Sir Win Bischoff, Chairman of the FRC.
‘This new Code, in its new shorter and sharper form, and with its overarching theme of trust, is paramount in promoting transparency and integrity in business for society as a whole.’
The Institute of Directors (IoD) praised the new Code. Dr Roger Barker, Head of Corporate Governance at the Institute, stated: ‘The IoD welcomes the publication of the revised UK Corporate Governance Code, particularly its engagement with a wider range of stakeholders, including the workforce, as well as encouragement of more long-term oriented business behaviour and recognition of the board’s role in overseeing a company’s purpose and culture.’
The new Corporate Governance Code can be read in full here.