The Wates Principles have been created in recognition of problems companies face and to encourage adoption of a set of key behaviours to secure trust and confidence among stakeholders and benefit the economy and society in general.
Looking in the mirror
These Principles are part of a number of changes made this year to the UK corporate governance framework. They have been developed by a coalition established by the Financial Reporting Council (FRC) and chaired by James Wates. By explaining the application of these Principles large private companies will be able to meet their obligations under The Companies (Miscellaneous Reporting) Regulations 2018. Mr Wates, chairman of Wates Group, said ‘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 cover purpose and leadership, board composition, board responsibilities, opportunity and risk, remuneration, and, stakeholder relationships and engagement. Reporting against these principles will take effect on 1 January 2019. The UK government 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.