Good corporate governance is about effectively supervising the management of a company to uphold the company’s integrity, achieve more open and rigorous procedures and ensure legal compliance. Ultimately it should also promote good relations with stakeholders, including shareholders and employees. Since the UK Corporate Governance Code was created, corporate governance has evolved to reflect changing stakeholder priorities. Most recently, concerns have been about making sure leadership teams and boards have oversight of corporate culture, and are engaging with their stakeholders, including employees. Executive pay and a lack of diversity on boards and in top leadership teams are also key issues in corporate governance.
This factsheet explores the purpose of corporate governance, the regulations that reinforce it, and best practice as specified by the Code. It also looks at the roles and responsibilities of the board members as well as the audit, remuneration and nomination sub-committees.
Explore our viewpoint on corporate governance and transparent reporting. See our report 'How do companies report on their ‘most important asset?' for an analysis of workforce reporting in the FTSE100 and how to establish better quality reporting practices.
This factsheet was last updated by Ben Willmott: Head of Public Policy, CIPD
Ben leads the CIPD’s Public Policy team, which works to inform and shape debate, government policy and legislation. His particular research and policy areas of interest include employment relations, employee engagement and well-being, absence and stress management, and leadership and management capability.
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