Wates chief draws up first best behaviour code for private firms

Aaron Morby 6 months ago
Share

The Financial Reporting Council has set out the final details of its plan to raise corporate governance standards for private companies.

James Wates hopes a wide range of firms – and not just those included in the new legislative requirement to report on their corporate governance arrangements

The stricter regime was drawn up for the FRC by construction group chairman James Wates to help prevent major private company corporate failures.

It sets out plans to restore trust in businesses with a boardroom code that sets out the main executive’s purposes, structure and remuneration, which should be aligned to the long-term success of the firm and reflect pay elsewhere in the business.

From January 2019, the FRC wants large private business to follow six principles to inform and develop their corporate governance practices and adopt them on an ‘apply and explain’ basis.

This new reporting requirement applies to all companies that either employ more than 2,000 staff or have over £200m revenue.

The so-called Wates Principles encourage firms to adopt a set of key behaviours to secure trust and confidence among stakeholders and benefit the economy and society in general.

James Wates said: “I believe that good business, well done, is a force for good in society.

“The Wates Corporate Governance Principles are a tool for large private companies that helps them look themselves in the mirror, to see where they’ve done well, and where they can raise their corporate governance standards to a higher level.

“Good corporate governance is not about box-ticking It can only be achieved if companies think seriously about why they exist and how they deliver on their purpose then explain – in their own words – how they go about implementing the principles.

“That’s the sort of transparency that can build the trust of stakeholders and the general public.”

The six principles

  • Purpose and Leadership – An effective board develops and promotes the purpose of a company and ensures that its values, strategy and culture align with that purpose.
  • Board Composition – Effective board composition requires an effective chair and a balance of skills, backgrounds, experience and knowledge, with individual directors having sufficient capacity to make a valuable contribution. The size of a board should be guided by the scale and complexity of the company.
  • Board Responsibilities – The board and individual directors should have a clear understanding of their accountability and responsibilities. The board’s policies and procedures should support effective decision-making and independent challenge.
  • Opportunity and Risk – A board should promote the long-term sustainable success of the company by identifying opportunities to create and preserve value and establishing oversight for the identification and mitigation of risks.
  • Remuneration – A board should promote executive remuneration structures aligned to the long-term sustainable success of a company, taking into account pay and conditions elsewhere in the company.
  • Stakeholder Relationships and Engagement – Directors should foster effective stakeholder relationships aligned to the company’s purpose. The board is responsible for overseeing meaningful engagement with stakeholders, including the workforce, and having regard to their views when taking decisions.

Business Secretary Greg Clark, said: “These principles drawn up in consultation with businesses, investors and unions further strengthen our business framework.

“From defining a company purpose at board-level, to embracing a diversity of skills and backgrounds in the boardroom.  I expect to see our bigger private businesses build on the work they are already doing and take action to support and adopt these practical steps to ensure our businesses continue to inspire public trust and confidence.”

“The FRC is pleased to be leading this work with James. Large private companies impact widely on society and play an important role in the UK economy. Through promoting positive corporate behaviours these principles have the potential to help restore trust in business and contribute to long-term sustainable growth in the UK economy.”

Latest news

Shaylor files notice of intent to appoint administrator

Subcontractors walk off sites as Midlands contractor seeks extra finance
2 days ago

Bidders day for £900m Heathrow rail tunnel project

Planned 6.5km rail link between the Great Western Main Line and London Heathrow Airport
2 days ago

Grenfell: 75% of unsafe blocks still to be reclad

Owners of 328 high rise blocks still need to complete remediation
2 days ago

Building products firm Alumasc issues profit warning

Problems at Levolux division cast shadow over upcoming results
2 days ago

Wooden football stadium plan rejected

Council rejects Forest Green Rovers plan for Zaha Hadid designed new ground
3 days ago

Flannery Plant Hire spends £30m on Cat machines

Huge deal signed at Plantworx exhibition
2 days ago

Boost your online presence – join the Enquirer Directory

Site for suppliers and buyers showcases products, services and latest stories
1 year ago

£1bn Stratford East Bank scheme clears final planning

Cultural and education centre in Olympic Park ready to go
3 days ago

Ringway wins £420m road maintenance deal

Highways England East Region contract could last 15 years
3 days ago

Hammerson unveils new Birmingham city quarter plan

1,300 homes and 1.4m sq ft of workspace planned for Martineau Galleries site
3 days ago

Planning row sees roads blocked on Persimmon site

Council blocks construction traffic to housing site
3 days ago

Tolent lands £84.5m Durham Milburngate contract

Contractor bags one of its biggest ever deals with main construction work set to start shortly
4 days ago

Government commits to net zero carbon by 2050

Industry must quickly rise to the challenge of improving the existing building stock
4 days ago

Extra week to put forward your favourite construction firms

Construction Enquirer Awards deadline extended: Enter online now
6 days ago

Wates ramps up FM offering with new business

Wates FM will target public sector work and wider spectrum of private clients
4 days ago

Worker killed by remote-controlled crane

Lift goes fatally wrong on National Grid site
4 days ago

Lendlease to start Manchester Potato Wharf phase 2

Castlefield scheme consists of two eight storey blocks
4 days ago

Wood drafted in for Hinkley Point C technical services

New Hinkley technical support deal to improve project delivery and commercial performance
4 days ago

Post Brexit skills shortages to push up tender prices by 4%

Consultant Arcadis predicts cost inflation rise in 2022
4 days ago

Robertson shuts “umbrella” employment on housing job

Workers moved back onto PAYE following union complaints over construction charter breach
5 days ago

Truro and Woking secure £142m for housing infrastructure

Local authorities secure cash to improve roads and access to housing land
5 days ago

Kier axes plan to charge subcontractors to work with them

New chief executive drops 'pay to get paid' plan
5 days ago

Scaffolder killed in fall fitting guardrails on fragile roof

Fine and suspended jail sentence following site tragedy
5 days ago

Ardmore gets call on £85m Southwark Fire Station revamp

Contractor lands first scheme by JV of Goldman Sachs International and Urbanwise Developments
6 days ago

Amey raids Colas for highways team director

Colas Aviation and infrastructure boss will run Amey's 25-year Sheffield maintenance job
6 days ago

Crest Nicholson margins fall to 14%

House builder cuts private homes sales in shift to affordable and PRS housing
5 days ago

Gender equality in construction “will take nearly 200 years”

GMB union holds Hinkley site meeting as it reveals latest workforce analysis
5 days ago

B&K signs off £60m Preston UCLan student centre

Work to start this month on student centre and new civic square
6 days ago

165 tonnes of steel needed to fix botched Liverpool hospital

Laing O'Rourke to start structural work this month to repair former Carillion project
6 days ago

Kier pulls off contracts league double

Near £260m haul of orders secures May league pole position for group
6 days ago

Contractor services