Corporate governance

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Corporate governance is not specifically defined either by the Companies Act 2006 or any other legislation. The generally accepted meaning is that given by the Cadbury Committee. This was a committee chaired by Adrian Cadbury that set out recommendations on the arrangement of company boards and accounting systems to mitigate corporate governance risks and failures and which, in 1992, produced the ‘Cadbury Report’ titled ‘The Financial Aspects of Corporate Governance’. In this report, corporate governance is defined as ‘the system by which companies are directed and controlled’.

For an overview of the corporate governance requirements relating to share schemes, see Practice Notes: An introduction to corporate governance and share schemes and for guidance on the more practical aspects of the UK corporate governance regime, see Practice Note: Corporate governance—fundamentals.

UK Corporate Governance Code

In the UK, the Financial Reporting Council (FRC) is responsible for regulating corporate governance in listed companies through the UK Corporate Governance Code (Code). Adherence to the Code is an expectation of institutional shareholders and their representatives (in particular the Investment Association (IA), the Pensions and Lifetime Savings Association (PLSA) (formerly known as the National

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Share Incentives weekly highlights—19 December 2024

This week's edition of Share Incentives weekly highlights includes (1) the announcement by ISS Governance of its new 2025 benchmark policy updates, (2) the FCA’s publication of its consultation paper on the proposed regulatory framework for the Private Intermittent Securities and Capital Exchange System (PISCES), (3) the Lexis+® UK Practical Guidance and Market Standards Trend Report reflecting on the voting patterns displayed during the 2024 AGM season, (4) HMRC’s publication of minutes of a subgroup meeting on changes to taxation of non-domiciled individuals, and (5) a new Q&A in respect of employee ownership trusts with a corporate trustee.

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This week's edition of Share Incentives weekly highlights includes (1) an update on the progress of Finance Bill 2025 and the National Insurance Contributions (Secondary Class 1 Contributions) Bill in the House of Commons, (2) the 2025/26 Scottish Budget and (3) the case of Simrajsar Ltd and another v Revenue and Customs Commissioners, in which the First-tier Tax Tribunal concluded that termination payments constituted taxable earnings.

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