When the UK government announced the corporate governance reforms it firmly brought the subject back into the spotlight for accountants and accountancy firms. The question now for accountants is 'Is your corporate governance policy robust enough?'
With the reforms covering executive pay; employee, customer and stakeholder strength of voice; governance in private businesses; and more, the implications could well affect you. If you're a listed company you will be required to publish and justify pay ratios between your average worker and your CEO. Where shareholders have objected to executive pay, your organisation will be listed in a public register. You will also need to detail how you take your employees interests into account. It doesn't just affect public businesses, either. Many private businesses will be brought into the spotlight with the planned reforms. As the FT recently said, "Britain's business reputation cannot afford any more Sir Philip Greens or Mike Ashleys."
Whilst some bodies, such as the TUC, have criticised the reforms as not going far enough, other authoritative voices, including the Financial Times, think that it suitably wide-reaching. Whatever you may think, the reforms are planned to be incorporated into the Corporate Governance Code by June 2018, so now seems a good time to start looking at your own policies and reviewing what changes you may need to make.
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