Corporate Governance – Recent Reforms

The government has recently enacted legislation requiring larger companies to adopt stronger corporate governance arrangements and improve their engagement with employees, customers, suppliers and other stakeholders. The impact of the reforms varies according to the size of the company concerned.

All companies with more than 250 employees will have to include in their directors' report a summary of how the directors have engaged with employees and had regard to employee interests, including the effect of that regard on the company's principal decisions.

Large companies (having two or more of a turnover of more than £36 million, a balance sheet total of more than £18 million, and more than 250 employees) will have to include in their strategic report a statement describing how the directors have had regard to their various duties. The directors' report should include a statement summarising how the directors have had regard to the need to foster the company's