The Financial Reporting Council is seeking views on its proposal to revise the corporate governance code, the U.K. regulator promoting corporate governance and reporting to foster investment said in a statement Tuesday.
The proposed code aims for boards of U.K. businesses to undertake effective engagement with wider stakeholders and employees, FRC said.
In addition, the new set of rules asks businesses to ensure appointments to boards and succession plans are based on objective criteria. The FRC also wants businesses to be more specific about responses to shareholder opposition on any resolutions, including those on executive pay policies and awards.
"The revised code is built on an updated set of principles emphasizing the value of good corporate governance to the sustainable growth of a company," said Margot James, U.K. business minister, in a news release.
The U.K. Pension and Lifetime Savings Association say both positives and negatives with the consultation.
Luke Hildyard, policy lead for stewardship and corporate governance at PLSA, said in a separate release, "while the code is rightly focused on principles rather than prescriptive requirements, there is also no mention of pension fund deficits or climate change — two long-term strategic issues with a profound impact on many companies that should perhaps be cited in relation to stakeholder relations, risk management or leadership."
Mr. Hildyard added: "The proposed code contains many positive new measures, particularly the recognition of the importance of corporate culture and employee voice. However, monitoring and enforcement of these provisions will be critical. PLSA research found that most companies already pay lip service to these issues in annual reports, but provide little concrete data demonstrating the strength of their relations with the workforce,"
FRC is accepting views on the proposal until Feb. 28.