Monday, 27 February 2017

UK: Purposeful Company Task Force publishes its final report

The Purposeful Company Task Force was formed within the Big Innovation Centre under the direction of the Purposeful Company Steering Group. It was set up to consider how the UK governance and capital markets environment could be improved to support the development of value generating companies, acting with purpose to the long-term benefit of all stakeholders. The Task Force has published its final report - see here (pdf) - and this contains 22 recommendations within six policy areas: (i) company law and reporting; (ii) accounting for purpose; (iii) repurposing the investment management industry; (iv) blockholding; (v) finance for purpose; (vi) and executive remuneration.

In area (i) it is, for example, recommended that directors should be required to report on how they fulfill their obligations under section 172 ("Duty to promote the success of the company") of the Companies Act 2006. In area (iii) it is said that investors' responsibilities concerning stewardship should be clarified and oversight strengthened (and, more specifically, it is recommended that the FRC should set-up a review to investigate mechanisms for independently reviewing stewardship quality, to build upon the current tiering activities in relation to the Stewardship Code).

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