PwC recently held a ‘Corporate Governance Masterclass’ event for private businesses which looked in depth at the changing attitudes towards corporate governance and at what lies ahead for the governance of private companies in 2021 and beyond. In this virtual session, Suzi Woolfson, Private Business leader at PwC was joined by Hannah Harris, Matt Timmons and Fabia Welch-Richards - also from PwC.
If you missed the event and are keen to view the session in full, then you can view the recording of our ‘Corporate Governance Masterclass’ event below. For those a little short on time, please find here our key takeaways from the session:
- There are many critical drivers for governance reform. Firstly, governance has become much more regulated over the past two years which has led to misunderstanding of the rules and many challenges for businesses. Secondly, Covid-19 has heightened areas of focus such as directors’ risk and insolvency. The bottom line is that the focus on governance is not going away, so private companies need to act appropriately.
- There’s never a one-size-fits-all approach with Corporate Governance and this is consistently felt across different industries, with many varying themes being witnessed. For example, we’ve seen a much greater focus on PE houses prioritising governance and 2020 being a key year where businesses have set out forward looking plans for improving their governance - particularly for subsidiaries.
- Living and breathing best practice is absolutely crucial. It’s never been more important for boards to ensure that everything is documented and reporting is well structured and thought out - especially as so many of the crucial business decisions directors’ are making are now publicly disclosable. The FRC has published extensive guidance on this and are always encouraging businesses to evidence examples of good practice and to add real detail around board governance processes and controls. There are big implications here for Section 172 too - it’s imperative to convey how you have, and are continuing to, implement this key statutory duty across the organisation.
- A key element in any discussion about the future of Corporate Governance is the Corporate Insolvency and Governance Act. Whilst it provides businesses with much needed breathing space, the importance of directors’ duties and the role of governance is also clear.
- There have also been significant changes with the publication of two supreme court cases which have real practical implications for businesses of all sizes, group structures and for directors. The crucial point here for directors is to always consider all stakeholders as part of any decisions undertaken and clearly document this.
Corporate governance is understandably extremely high on the agenda for many businesses and we hope that the content presented helps you think about how this affects your organisation. If you’d like a follow up discussion around any of the points raised, or have other queries that are specific to your private business, then please get in touch with a member of the team on the below details.