Rachel Reeves comments on Wates Principles to improve corporate governance standards among private companies

Rachel Reeves, Chair of the Business, Energy and Industrial Strategy Select Committee, has commented on the Wates Principles published today [Monday] to improve corporate governance standards among private companies.

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee said: "Recent scandals at BHS and Carillion have helped to undermine public trust in business and corporate culture. Corporate governance must be improved to provide assurance to investors and the public. Taking greater consideration of the diversity of board membership and adopting an approach to executive pay which takes account of the whole workforce are positive developments but only if businesses truly step up to the task and act on these issues.

"The Wates Principles are welcome and recognise the importance of increased transparency in improving performance and trust in private companies. The collapse of BHS highlighted the damage which private companies can do. Firms must not be able to go private as a means to escape accountability. Principles have to be backed up by action and as a Committee concerned with how corporate governance operates in practice, we will be keen to keep a close eye on the future effectiveness of the Code.”

The Wates Principles are part of a number of changes made this year to the UK corporate governance framework. They have been developed by a coalition established by the Financial Reporting Council (FRC) and chaired by James Wates CBE.