UK CorporateGovernance Code
Martin Lipton ( Wachtell, Lipton, Rosen & Katz)
The Financial Reporting Council ssued a revised corporate governance code and announced that a revised investor stewardship code will be issued before year-end.
The code and is available here
The revised code contains two provisions that will be of great interest…for U.S. corporate governance codes & … efforts to expand the sustainability and stakeholder concerns of U.S. boards.
Shareholder primacy needs to be moderated / the concept of the “purpose” of the corporation is the guiding principle for the revised code:
Companies do not exist in isolation. Successful and sustainable businesses underpin our economy and society by providing employment and creating prosperity. To succeed in the long-term, directors and the companies they lead need to build and maintain successful relationships with a wide range of stakeholders. These relationships will be successful and enduring if they are based on respect, trust and mutual benefit. Accordingly, a company’s culture should promote integrity and openness, value diversity and be responsive to the views of shareholders and wider stakeholders.
The board is responsible for policies and practices which reinforce a healthy culture and that the board should engage:
with the workforce through one, or a combination, of a director appointed from the workforce, a formal workforce advisory panel and a designated non-executive director, or other arrangements which meet the circumstances of the company and the workforce.
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