The report touches on a number of important issues, including the recognition of the political impact of corporate governance arrangements, the necessity for compliance with corporate governance codes to be checked by a regulatory body, the recommendation for the abolition of long-term incentive plans, the annual publication of pay ratios, gender ratios for boards, and the inclusion of workers on boards.
These recommendations are very much in line with the recommendations we provided earlier to the Select Committee and with many of the opinions voiced in the debate on corporate governance held at Cass Business School on March 22.
The recommendations put forward by the BEIS Select Committee provide interesting guidance for the UK Government to rethink the corporate governance architecture. The current architecture focuses on shareholder value, which undermines companies’ ability to invest in their future and diminishes their capacity to anticipate and mitigate systemic risks. Rethinking this architecture is necessary to support long-term oriented sustainable business models for the benefit of shareholders and society alike.
Cover picture / Ian Rees