Matthew Fell, CBI Deputy Director-General, said:
“Great corporate governance is the unsung hero of brilliant businesses.
“Private companies play a major role in our economy and society, so it is important they are held to similarly high standards as their public-owned counterparts.
“The new Wates Principles can help private businesses take their governance to the next level, with robust decision-taking informed by strong engagement with their employees, customers and owners.
“Critically, these new principles give firms the flexibility to determine what approach works for them.”
Notes to Editors:
The Wates Principles have been developed by a coalition group, which included the CBI’s Chief UK Policy Director, Matthew Fell. This new code provides a benchmark for good governance in large private companies and sets out six key principles which are relevant to all private firms regardless of size.
The coalition group brought together senior business leaders, industry groups and representatives from the Financial Reporting Council (FRC) and Department for Business, Energy and Industrial Strategy. In addition to the group’s input, a 12-week public consultation provided the opportunity for private businesses to share their views of the draft code earlier this year. Following a thorough review of the consultation findings the Wates Principles were finalised and published earlier today.
The Wates Principles represent a key proposal in the Government's 2017 green paper reforms to enhance the public's trust in business. It is the first formal code recognised by the regulator with Government backing. It builds on key themes from existing rules for large publicly listed companies.
The FRC will now begin to monitor which companies adopt the code, under new mandatory reporting requirements for all large private companies with more than 2000 employees, or an annual turnover of £200 million and balance sheet of more than £2 billion. From 2020, all private companies of this size will need to report their governance arrangements.