"Apply and explain"
The Wates Corporate Governance Principles for Large Private Companies, published on 10 December, provide a framework of principles for companies to adopt in complying with their reporting obligations under the Companies (Miscellaneous Reporting) Regulations 2018. This new reporting requirement applies to all companies that have (a) more than 2,000 employees; and/or (b) a turnover of more than £200 million, and a balance sheet of more than £2 billion. Rather than adopt a prescriptive, rules based, approach, companies applying the principles are expected to apply them to the operation of their business and then explain in their own words how they have done so. This should require large private companies to put real thought into, and provide an opportunity for companies to distinguish themselves with the quality and transparency of, their governance reporting.
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”