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2018 In-House Persp. [1] (2018)

handle is hein.journals/inhouse14 and id is 1 raw text is: Agenda-setting UK governance code revisions emphasise company culture and workforce engagement IHP Home (/IHP.aspx) News (/IHP_news.aspx) Features (/IHP_features.aspx) Opinion (/IHPopinion.aspx) Film (/IHP_video.aspx) Archive (/Publications/publications_in_houseperspective.aspx) Neil Hodge The UK's corporate governance regulator, the Financial Reporting Council (FRC), has published proposed revisions to the UK Corporate Governance Code. These follow criticism that boardroom pay does not reflect company performance, and that executives are still not being held properly to account. The Code celebrates its 25th anniversary this year; it has been revised five times in the past decade alone. This reflects the fact, perhaps, that even a principles-based approach to corporate governance cannot keep pace with stakeholder concerns over how companies are run, nor boards' failure to govern properly. The recent collapse of UK construction giant Carillion, which was involved in several key UK public infrastructure and building projects, looms large. There are concerns that its non-executives failed to probe company strategy, and that the company ignored the potential impact of its business failure on its suppliers and contractors. The FRC is keen to point out that the changes are more like 'tweaks', rather than substantive revisions. They are intended to improve boards' focus on the importance of long-term success and sustainability, address issues of public trust in business, and ensure the attractiveness of the UK capital market to global investors throughout the Brexit negotiations and beyond 2019, when the UK leaves the European Union. As such, the Code has been 'shortened and sharpened' to make it clearer what is expected of boards, and how they should deliver the Code's principles. It now has five sections, which focus on: leadership and purpose; division of responsibilities; composition, succession and evaluation; audit, risk and internal control, and remuneration. Improving corporate culture is very much at the heart of the proposed reforms. Following the FRC's 2016 report - Corporate culture and the role of boards- the revised Code sets out good practice so that the boards can make sure that a company's purpose, strategy and values are aligned with its culture, as well as undertake effective engagement with wider stakeholders (as opposed to focussing solely on shareholders).