Springhouse Solicitors

Corporate governance legislation update

The Government has clarified its proposals to change the way large companies are run at the top level.

The Government plans to legislate so that all large companies (whether PLCs or not). Their proposed way of doing this is to force Directors to demonstrate how they have protected employee interests, and the interests of other non-shareholders. Private companies will be encouraged to produce a voluntary set of rules, but no sanctions or complaints tribunals are envisaged. We will see draft legislation hopefully at the end of the year.

Executive pay is obviously a big issue. Pay ratio reporting is planned, comparing CEO pay with that of the rest of the workforce.

In relation to the composition of boards, there is no proposal for fixed proportions of women.