5th April 2017.

MPs demand radical overhaul of corporate governance

MPs on the BEIS Select Committee have published their report into corporate governance They call for radical measures to tackle a loss in public confidence in business, including an end to LTIPs and a simplification of executive pay. Committee Chair Iain Wright said: “Recent scandals and the issue of executive pay have undermined public trust in corporate culture.” Chief among the proposals is the recommendation that the Financial Reporting Council have new powers to hold directors to account on all legal duties related to Section 172 of the Companies Act. BEIS also asked that the FRC set up a red-amber-green “traffic light alert system” for boards found not to be executing their responsibilities and NEDs holding multiple board seats should have to demonstrate to the FRC that they are able to commit sufficient time to each company. The committee wants the reforms to be extended to private companies, not just listed ones, a move backed by the IoD. Additionally, the report said half of the UK’s senior executives should be female and called on firms to publish pay ratios and to put workers on remuneration committees. The FRC praised the report as “considered and far-reaching”, the FT says, but also noted that implementing the ideas would have “significant implications for the FRC’s remit, resources and funding”.

The Times   Sky News   Financial Times   The Guardian, Page: 18   The Daily Telegraph    Financial Reporting Council   Independent i, Page: 5   Daily Mail, Page: 18   Daily Mirror, Page: 8