Clifford Chance

Government Publishes Watered-Down Corporate Governance Reforms

29 August 2017

On 29 August 2017, the UK Government published a package of corporate governance reforms, intended to enhance the public's trust in business. Whilst the Government is not pressing ahead with a number of the initial proposals set out in its November 2016 Green Paper on Corporate Governance reform, companies can expect to see (i) new legislation requiring all large listed companies to reveal the pay ratio between their CEO and their average UK worker; (ii) the establishment of a public register naming all listed companies where over 20% of investors have voted against the company's annual shareholder vote on its directors' remuneration report; (iii) new proposals to strengthen the voice of employees in the boardroom; and (iv) the introduction of a new voluntary corporate governance code for large private companies. No longer on the agenda however are the most radical proposals which contemplated putting workers on company boards and the introduction of an annual binding vote on executive pay.

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