Green paper on corporate governance reform - Law Society response
In November 2016 the Department for Business, Energy & Industrial Strategy (BEIS) published a green paper setting out options for corporate governance reform.
The green paper was in response to the behaviour of a few companies which damaged the reputation of other, responsible, companies and raised doubts about the corporate governance structure in the UK.
BEIS asked for views on three areas:
- shareholder influence on executive pay
- measures that could strengthen the connection between boards of directors and other groups with an interest in corporate performance such as employees and small suppliers
- extending the features of corporate governance applicable to listed companies to large privately-held companies.
We support good corporate governance and the role it plays in effective and efficient business, and in the protection of the public interest.
We agreed with some of the government's objectives. However, we feel some of the proposed measures need to be evaluated against the risk of being too prescriptive.