January 16, 2025 New leadership for Wates Principles
At the end of 2024 the founding father of the Wates Corporate Governance Principles for Large Private Companies, Sir James Wates CBE, stepped aside from the role which he had established and made his own some seven years earlier. Following on from an original government request in 2017 and building on a number of consultations, the Wates Principles were formally launched in December 2018.
Directed towards large private companies with more than 2,000 employees or a turnover of more than £200 million and a balance sheet of more than £2 billion, over the years the Wates Principles have also been adopted by other organisations. The ongoing impact which the Principles have in the marketplace can be seen by the way in which research in August 2024 revealed that the Principles continue to be the most commonly adopted code amongst the target audience of large private companies.
The code is based around six principles which together aim to help board directors to understand and apply good practice in corporate governance, including the maintenance of strong stakeholder interactions. The six principles form a pyramid with purpose and leadership at the top. The fundamental principles of opportunity and risk, remuneration, and stakeholder relationships and engagement underpin the triangle; whilst board composition and director responsibilities sit at the heart of the structure.
Each of these six principles are themselves underpinned by recommended actions and approaches which reflect business best practices. As with other corporate governance guidelines, the Principles promote clear and constructive disclosures which are specific to the individual organisation.
Following Sir James Wates’ decision to step aside from the role, he commented that he had: “been proud to serve as Chairman of the Wates Principles Coalition Group, which, with the support of the Financial Reporting Council, brought insight and wisdom to the development of the Wates Principles.”
The Financial Reporting Council (FRC) has now assumed leadership of the Wates Principles. Announcing the transfer of leadership FRC CEO Richard Moriarty said: “Companies that follow the Wates Principles now contribute over £850 billion to the UK economy, and Sir James’s personal contribution to promoting good governance in this sector will have a lasting legacy. Building on this legacy, the FRC will continue to set high standards of corporate governance for large private companies in a proportionate manner that supports economic growth and protects the broader public interest.”
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