Corporate governance has been under the spotlight for a while and it has featured heavily on Talking Business over the last year. Recently we have seen the publication of the new UK Corporate Governance Code, the proposed introduction of a beneficial ownership register of overseas companies that own UK property and a new governance code for private companies.
These changes have stemmed from a number of high profile corporate failures, including the collapse of BHS and Carillion, and the Sports Direct scandal. These failures may have been prevented had the companies been managed more effectively by the directors, particularly when facing financial difficulties. This has led the Government to introduce significant reform in this area, including by seeking to strengthen transparency requirements around complex group structures and enhancing the role of shareholder stewardship. The UK’s framework relating to dividend payments will also be strengthened and directors of group companies will face greater accountability when selling subsidiaries in distress. All of these proposals are contained in the Government’s response to its consultation on insolvency and corporate governance.
Talking Recovery has published a briefing note on these reforms.