Private Business Corporate Governance

Private Business Governance 

Corporate governance is now firmly on the agenda of private businesses. Following the introduction of the new Corporate Governance reporting regulations and Wates Principles, private businesses have clear guidance on what the government and regulators expect along with a framework and principles to satisfy the law.

These new rules are applicable across all sectors and impact all companies irrespective of ownership structure e.g. family business, private equity, parent company headquartered overseas.

For many they will need to prepare and disclose publicly between 3-4 new corporate governance reports focused on directors’ duties, along with stakeholder and employee engagement.

Regulators have made it very clear that this is not to be a tick box exercise. During the period of transition, businesses will be expected to invest time up front to ensure their governance and new corporate reporting obligations meets the new requirements. Non-compliance could lead to public sanction and prosecution of directors along with fines against the company.

These new rules apply for accounting years beginning on or after 1 January 2019. For a company with a 31 December year end, they will need to ensure that changes are made between 1 January 2019 to 31 December 2019 to be reported in 2020.

Be prepared

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.

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Be prepared

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?

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Take action

What action should you take?

  1. Undertake an analysis of your legal entity structure to assess which of your UK companies are caught against each of the four reporting requirements.
  2. 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?
  3. Provide training to all statutory directors and senior management.
  4. Identify stakeholders and what is to be considered to be a principle decision?
  5. Review employee engagement strategies and identify board sponsor.
  6. Considered adopting a UK Corporate Governance policy to apply to all active entities.

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Beyond compliance

Good corporate governance, goes beyond just compliance:
  1. Support broader regulatory compliance e.g. HMRC Business Risk Reviews, Corporate Criminality offence.
  2. Enchance the reputation and brand (magnified by social media) against a background of increased focus in ESG by investors, customers and regulators.
  3. Fulfill government procurement/contractual terms for public service contracts.
  4. Is a requirement for external licencing e.g. Ofgem, Pharma etc.
  5. Reduces personal liability of directors, executive directors, board members and shareholders against corporate failure.

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We are proud to be working with private businesses of all sizes across the country helping them to understand these new requirements and get their corporate governance right both here and now and for the long term. Find out how we can support your business.

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Contact us

Suzi Woolfson

UK Private Business market leader, PwC United Kingdom

Matthew Timmons

Entity Governance & Compliance, Director , PwC United Kingdom

Tel: +44 (0)20 7804 6561

Hannah Harris

UK Family Business Leader, PwC United Kingdom

Tel: +44 (0)7764 958585