June 13, 2018 / 6:23 AM / 12 days ago

BRIEF-FRC Consults On Corporate Governance For Large Private Companies

June 13 (Reuters) -

* THE FINANCIAL REPORTING COUNCIL PUBLISHES CONSULTATION ON CORPORATE GOVERNANCE PRINCIPLES FOR LARGE PRIVATE COMPANIES

* THE SIX PRINCIPLES ARE: PURPOSE – AN EFFECTIVE BOARD PROMOTES THE PURPOSE OF A COMPANY, AND ENSURES THAT ITS VALUES, STRATEGY AND CULTURE ALIGN WITH THAT PURPOSE.

* COMPOSITION – EFFECTIVE BOARD COMPOSITION REQUIRES AN EFFECTIVE CHAIR AND A BALANCE OF SKILLS, BACKGROUNDS, EXPERIENCE AND KNOWLEDGE, WITH INDIVIDUAL DIRECTORS HAVING SUFFICIENT CAPACITY TO MAKE A VALUABLE CONTRIBUTION. THE SIZE OF A BOARD SHOULD BE GUIDED BY THE SCALE AND COMPLEXITY OF THE COMPANY.

* RESPONSIBILITIES – A BOARD SHOULD HAVE A CLEAR UNDERSTANDING OF ITS ACCOUNTABILITY AND TERMS OF REFERENCE. ITS POLICIES AND PROCEDURES SHOULD SUPPORT EFFECTIVE DECISION-MAKING AND INDEPENDENT CHALLENGE.

* OPPORTUNITY AND RISK – A BOARD SHOULD PROMOTE THE LONG-TERM SUCCESS OF THE COMPANY BY IDENTIFYING OPPORTUNITIES TO CREATE AND PRESERVE VALUE AND ESTABLISH OVERSIGHT FOR THE IDENTIFICATION AND MITIGATION OF RISK.

* REMUNERATION – A BOARD SHOULD PROMOTE EXECUTIVE REMUNERATION STRUCTURES ALIGNED TO SUSTAINABLE LONG-TERM SUCCESS OF A COMPANY, TAKING INTO ACCOUNT PAY AND CONDITIONS ELSEWHERE IN THE COMPANY.

* STAKEHOLDERS – A BOARD HAS A RESPONSIBILITY TO OVERSEE MEANINGFUL ENGAGEMENT WITH MATERIAL STAKEHOLDERS, INCLUDING THE WORKFORCE, AND HAVE REGARD TO THAT DISCUSSION WHEN TAKING DECISIONS. THE BOARD HAS A RESPONSIBILITY TO FOSTER GOOD RELATIONSHIPS BASED ON THE COMPANY’S PURPOSE.

* THE CONSULTATION IS OPEN UNTIL 7 SEPTEMBER 2018. Source text for Eikon: Further company coverage: [ ] (Reporting By Simon Jessop)

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