A new code for the corporate governance of large private companies has now been launched by the Financial Reporting Council.
Known as the Wates Principles, the new code is made up of the following six principles:
Recognising that a "one-size-fits-all" approach to corporate governance in large private companies is not appropriate, the principles are intended to be high-level and flexible, allowing the companies who adopt them to implement them in a way which works for them and helps to deliver their purpose. They are not prescriptive in the way that other codes are, for example the UK Corporate Governance Code.
A company adopting the Wates Principles should adopt them using an "apply and explain" approach in a way that is most appropriate for their particular organisation. Guidance runs alongside the Principles to assist companies in explaining their approach to applying each Principle in the context of their business and circumstances.
It has been confirmed that companies adopting the Wates Principles should provide a short supporting statement that gives "an understanding of how their corporate governance policies and processes operate to achieve the desired outcome for each Principle".
For more detail as to the context of the new code and who will be a "large" private company for the purposes of compliance, see our previous insight here. For a full copy of the new code (including guidance), please visit the FRC website.
If you would like detailed advice on the above, please do get in touch.
 Note that stakeholders include the workforce, customers and suppliers of the company but also other material stakeholders specific to company circumstances or sectors, such as regulators, governments, pensioners, creditors and community groups.
Contributor: Alison Johnson
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at December 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.