A defining moment for private company corporate governance?
With media attention fixed on Theresa May pulling the Brexit vote, there was less focus on the publication of the final version of the Wates Principles for Large Private Companies on 10 December than might have been expected (click here for the Wates Principles and here for the Feedback Statement). As this is the first attempt at drafting a corporate governance code fit for adoption by unlisted companies, it will be interesting to see whether in 25 years time we will be celebrating the anniversary of a defining moment for the corporate governance of private UK companies (like the publication of the Cadbury Report for premium listed companies in 1992), or whether it will just become an additional burden for those responsible for drafting the Annual Report, with no real impact on big business or its reputation with the British public.
When assessing the impact of the Wates Principles, it helps to have an understanding of the broader context in which they were drafted. This publication represents the last piece of the puzzle with regard to the Government's myriad of new reporting requirements for large and very large companies. For a reminder of those new reporting requirements, which will apply to financial years starting on or after 1 January 2019, please see our quick recap below and our June 2018 client alert. It is estimated that around 1,700 companies will qualify as very large companies that need to make a corporate governance statement but the Government may choose to expand the scope in the future.
In this client alert, we look at the following:
- What do the final Wates Principles look like?
- The key question - are the Wates Principles (and the other recent reporting reforms) something that boards should devote time and resources to now?
- A quick recap of the new reporting obligations.
- Suggested action to take now.
- How we can help.