The Green Paper is a chance to improve governance, says Peter
ICSA's response to the Government's Green Paper on
Corporate Governance Reform was submitted on 17 February. This has
been a significant effort and I am grateful to those members and
others who have contributed to our drafting process.
Your help and support is much appreciated and we have done our
best to incorporate your ideas into our final response, which can
be found on the ICSA website. The team and I have now begun the
process of reading through other people's submissions, which is
very interesting. There are certainly a variety of views out there
– some of which we wholeheartedly agree with, and others,
well, not so much! I have written in more detail about our response
in my feature 'Both opportunity and threat'.
This remains an enormous opportunity for the Government to
improve governance in the UK and, at the same time, creates the
risk that we will damage what is, overall, an efficiently
functioning framework. We will continue to engage with the team at
BEIS as they move the output from the Green Paper forward.
"Larger private companies should be required
to have a properly qualified company secretary"
That framework is, however, showing signs of its age. Chris
Hodge points out in his paper 'Untangling corporate
governance', part of our Future of Governance series of thought
leadership, that it is being stretched to perform a role that was
never intended when the Cadbury Committee reported 25 years ago.
Chris talks about this in more detail in his feature
'Untangling corporate governance', but his analysis of the
strengths and weaknesses of the system is very helpful and will
inform some of our research activities throughout the year. I am
looking forward to working with our guest authors on further papers
in the series.
At our launch of the Future of Governance series, Sir Winfried
Bischoff, Chairman of the Financial Reporting Council, announced
the FRC's plans for a fundamental review of the UK Corporate
Governance Code. We will be working closely with the corporate
governance team at the FRC as this gets under way.
We have taken the opportunity presented by the Green Paper to
advocate three changes to support the role, and the independence,
of the company secretary. First, that larger private companies
should be required to have a properly qualified company secretary;
second, that the remuneration of the company secretary should be
the responsibility of the remuneration committee rather than any
executive director; and finally, that the right to provide a
statement of circumstances to shareholders, granted under the
Companies Act to an auditor who ceases to hold office, should be
extended to a company secretary.
"We strongly believe the term
'clerk' is out of date in terms of the range of
responsibilities these individuals are being asked to
We have also been working with the Department for Education on
the competency framework for clerks in schools. We strongly believe
the term 'clerk' is out of date in terms of the range of
responsibilities these individuals are being asked to undertake,
especially where they have the statutory responsibilities of a
company secretary and/or a trust secretary in an academy trust, and
especially in a multi-academy trust. This is a very different role
from that of the traditional maintained school clerk, more likely
to focus on minutes and school regulations. We are pressing the DfE
to think instead in terms of the governance professional in schools
of all kinds. We are running an Academy Governance Update CPD event
on 22 June.
The consultation on the revised Charity Governance Code has just
closed and we will be following up on this in due course and, in
particular, at the Charity Governance Update on 4 May. We are also
following closely the implementation of the Code for Sports
Governance, which is the subject of a members' event on 9 March
where we will launch a new guidance note on board effectiveness in
Finally, we are starting to hear some noise again about
companies who have paid unlawful dividends – we will pick
this up more in the next issue, but it does not add to the lustre
of our profession so can I ask all concerned, please, to check that
the necessary accounts have been lodged at Companies House before a
payment is made.
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