The Financial Reporting Council (‘FRC’) has published a ‘myth-buster’ overview that seeks to dispel the common misconceptions about the key boardroom topics of Corporate Governance and Stewardship.
The document addresses several frequently asked questions, such as:
- What is corporate governance?
- What do we mean by stewardship?
- Does the Corporate Governance code give the FRC powers to enforce against Directors?
Corporate governance and stewardship intersect in several ways. Institutional investors can play a critical role in promoting good corporate governance practices by actively engaging with companies and exercising their voting rights. This can include advocating for better Environmental, Social, and Governance (‘ESG’) practices, promoting transparency and accountability, and encouraging companies to consider the long-term interests of all stakeholders.
Companies that are well-governed are also generally more likely to create long-term value for shareholders, which can benefit investors in the long run. Both concepts work together to promote responsible corporate behaviour and long-term value creation.
The FRC is committed to promoting high standards of corporate governance and stewardship in the UK, and ensuring that these standards are properly understood and implemented by companies and investors alike.
To help achieve this, the FRC hopes this publication will provide greater clarity and understanding of these important topics.
Mark Babington, Executive Director of Regulatory Standards, said:
"Good corporate governance and stewardship are essential for the long-term success and sustainability of businesses. However, there is still some confusion about what Corporate Governance and Stewardship mean, what they involve and how the FRC fits in.
We hope this myth-buster will dispel some of the myths around these two important topics and prove a useful tool for everyone, regardless of their experience in this area.”
To read more of the FRC Overview click on this link.