Wates Principles of Corporate Governance (FRC Research Project)

Descriptions

THIS IS A CONTRACT AWARD NOTICE - THIS TENDER IS CLOSED / COMPLETED The FRC has awarded a contract for the provision of Services The Financial Reporting Council sets the UK Corporate Governance and UK Stewardship Codes; sets UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality. The FRC works in the public interest. Our work is aimed at investors and others who rely on company reports, audit and high-quality risk management. In June 2018 the UK Government introduced The Companies (Miscellaneous Reporting) Regulations 2018. These require all companies of a significant size, that were not already required to provide a corporate governance statement, to disclose their corporate governance arrangements. The Wates Corporate Governance Principles for Large Private Companies were published by the FRC in December 2018. They provide a framework to help companies not only meet the legal requirements of The Companies (Miscellaneous Reporting) Regulations 2018, but to promote long term success. The Wates Principles encourage companies to adopt a set of key behaviours to secure trust and confidence among stakeholders and to benefit the economy and society in general. The objective of this research project is to answer the following questions. A. Of the companies within scope of the Regulations for their first full reporting year beginning on or after January 2019, which of them provided a Corporate Governance Statement? Of those that did so: o Which companies applied a known corporate governance code? For each of these, which code was chosen (e.g. Wates Principles, UK Corporate Governance Code, Luxembourg Corporate Governance Code, etc), and did the company report any departures from that code? o Which of them instead reported that they were applying other corporate governance arrangements, and what was the stated reason for doing so? B. Taking a representative sample of companies that chose to apply the Wates Principles, what was the quality of their reporting?