1 July, 2020
The Wates Principles
Q. We are a large private company and we understand we are required to report against the Wates Principles in our next set of accounts. Can you summarise when these governance principles were introduced and the main issues we need to address?
A. The Wates Principles were published on 10 December 2018, as part of a wider package of Government corporate governance reforms.
The legal requirements, as set out in The Companies (Miscellaneous Reporting) Regulations 2018 (SI 2018/860) (the ‘CMRR 2018’), state that large private companies are required to report on their corporate governance arrangements in the annual report and on their website and to outline which, if any, formal corporate governance codes the company has applied and how it has been applied.
The reporting requirement, that came into effect for accounting periods commencing on or after 1 January 2019, applies to all private companies that satisfy either or both of the following conditions:
The Wates Principles introduce an approach to good corporate governance that provides flexibility and assistance for the large, private, unlisted companies which are subject to the thresholds set out under CMRR 2018 and aim to suit private companies better than the codes used by listed companies, such as the UK Corporate Governance Code or the QCA Corporate Governance Code.
The Wates Principles is a voluntary framework that adopts the ‘apply and explain’ approach. If a company chooses to apply these, they should describe and explain how they have addressed each of the six high level principles in the company’s governance practices. This is in effect to allow for increased transparency for stakeholders and links to how the directors have discharged their section 172 duty.
The principles include:
If you need any help with your governance statement or with any of your governance policies generally, please contact us. All our contact details are on our website www.brucewallace.co.uk.
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