Developments in Corporate Governance and Stewardship 2016

Financial Reporting Council

The Financial Reporting Council (FRC) has published its report on “Developments in Corporate Governance and Stewardship 2016” to commemorate the 25th anniversary of the Cadbury Report in the United Kingdom.

The FRC is the UK and the Republic of Ireland’s independent regulator of good corporate governance. Funded by the government (which also appoints its Board) and listed firms, it carries out a critical role in the supervision and development of corporate governance standards in the United Kingdom and the Republic of Ireland.

“Developments in Corporate Governance and Stewardship” analyses the development of governance principles through the standards that were set in response to the Cadbury Report, and their application in corporate life.

It covers the main changes to the UK Code, especially those made in 2014 to harmonise with European regulation on risk management and internal control, remuneration policy, shareholder relations, succession planning and reporting published by the Appointment Committee.

The document contains information about market initiatives, such as the programme run by the “Executive Remuneration Working Group” which began working in 2015 to analyse executive compensation schemes and reduce their complexity. The trends on diversity, continuing work started by Lord Davies, and which were noted in the November 2016 Hampton-Alexander report, were also included.

It contains an overall assessment of the UK Stewardship Code, analysing the most important conclusions and commenting on key regulatory and private initiatives.