Getting it right
Whilst some Private Businesses may view this as additional administration taking them away from “more important” business development activities, smart businesses already recognise the benefits of good corporate governance and have been using it to protect their reputation and future proof their business. Current corporate governance practices will need to be reviewed and evaluated to ensure relevance and that they are ‘fit for purpose’.
It’s important to note the new reports will form part of the auditable parts of the financial statements and will be published on a company’s websites.
Private business need to ask themselves:
- What’s new?
What do I need to disclose?
Can I roll forward what I already do?
What happens if I get this wrong?
What action should you take?
- Undertake an analysis of your legal entity structure to assess which of your UK companies are caught against each of the four reporting requirements.
- Review existing corporate governance across the business and identify gaps against the new reporting requirements What board meetings are held? Is it clear what matters are reserved for the statutory boards/directors, executives and shareholders? What group policies are in place?
- Provide training to all statutory directors and senior management.
- Identify stakeholders and what is to be considered to be a principle decision?
- Review employee engagement strategies and identify board sponsor.
- Considered adopting a UK Corporate Governance policy to apply to all active entities.
- Support broader regulatory compliance e.g. HMRC Business Risk Reviews, Corporate Criminality offence.
- Enchance the reputation and brand (magnified by social media) against a background of increased focus in ESG by investors, customers and regulators.
- Fulfill government procurement/contractual terms for public service contracts.
- Is a requirement for external licencing e.g. Ofgem, Pharma etc.
- Reduces personal liability of directors and shareholders against corporate failure.