UK Corporate Governance 2019

Corporate governance requirements are changing substantially from the start of 2019, with new compulsory reporting obligations and a much revised UK Corporate Governance Code.

The changes form part of the Government's reforms to the corporate governance framework with the aim of restoring trust in big business. There is much for listed companies to get to grips with and advance preparation will be important. This hub currently draws together materials on the two main areas of change for 2019, namely the new Companies (Miscellaneous Reporting) Regulations 2018 and the new July 2018 UK Corporate Governance Code , together with related guidance.

The Companies (Miscellaneous Reporting) Regulations 2018 along with related Frequently Asked Questions have recently been published by the Department for Business, Energy and Industrial Strategy. The new statutory reporting obligations involve increased statutory disclosures in annual reports, and in some cases on websites, by listed and other types of public and private companies in the areas of:

• Section 172 Companies Act 2006
• Engagement with employees and other stakeholders
• Remuneration matters including pay ratios
• Corporate governance arrangements (for large private and unlisted companies).

The Financial Reporting Council has issued its new UK Corporate Governance Code and revised Guidance on Board Effectiveness. Both documents are considerably restructured, With them, the FRC aims to ensure that the Code remains fit for purpose, continues to improve the quality of corporate governance and achieves long-term success and trust in business. New Code highlights include a broader definition of governance and emphasis on the importance of:

• Positive relationships between companies, shareholders and other stakeholders.
• A clear purpose and strategy aligned with healthy corporate culture.
• High quality board composition and a focus on diversity.
• Remuneration which is proportionate and supports long-term success.