The Corporate Governance Reform Package is coming; issued by the government in August 2017, it became effective for accounting periods beginning on or after 1 January 2019.
Why are regulations changing?
The environment that companies are operating in is changing:
- increased activism and shareholder revolts over environmental and social issues, gender equality, diversity and inclusion and excessive executive pay
- and a string of corporate scandals and failures in the last 5 years
What were the causes for all these scandals and failures? Poor corporate governance? Poor quality reporting? Poor quality auditing? Limited monitoring and enforcement? Arguably, it is a combination of all four. The result of these failures is a loss in public trust in business.
What is the Corporate Governance Reform Package?
The Reform Package set out the Government’s intentions in respect of rebuilding public trust in business by reforming the way companies are run, increasing stakeholder voice in the boardroom and increasing board effectiveness and accountability. The Reform Package has spawned new secondary legislation introducing additional disclosure requirements in the Strategic Report and Directors’ Report in relation to stakeholder engagement and executive remuneration, a revised UK Corporate Governance Code, revised Guidance on the Strategic Report, two Government commissioned independent reviews into the Financial Reporting Council and audit quality and effectiveness, as well as a CMA statutory audit services market study.
What is the role of Purpose?
Having a clear Purpose is at the heart of these reforms. The Code requires a “board to establish its company’s purpose, values and strategy and satisfy itself that these and its culture are aligned”. The Guidance on the Strategic Report states that “an entity’s purpose, strategy, objectives and business model are inter-related concepts”.
Every company’s Purpose should be supported by strong values and culture and a strategy which drives a long-term, sustainable and successful business model. Boards are expected to engage with and listen to their key stakeholders and respond appropriately to ensure their Purpose, and everything that follows, remains relevant and continues to support long-term sustainable success.
What’s the opportunity?
Purpose captures why a business exists, what it stands for, how it is different, and how people can expect it to act, both today and in the future.
A vital aspect of arriving at your Purpose is recognising that business does not operate in isolation, that it is dependent on people, society and the environment for long term success. This shift in mindset connects corporations more closely to the sustainability agenda and a broader view of value creation.
Which is why we believe that a Purpose-driven mindset presents an opportunity for a clearer and bolder sustainability ambition. It starts with the shift from managing risk to identifying opportunity – from being a responsible corporate citizen doing no harm, to strategically making a positive contribution through doing business.
This breakfast seminar will run on the morning of Thursday 28 March 2019.
Presenters on the day include:
Director of Reporting Intelligence
Director of Sustainability
To reserve your place now, please RSVP to firstname.lastname@example.org or call 020 3176 6602