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| 1 minute read

The King's Speech: A governance sized gap

The King's Speech took place on 7 November, setting out the programme of legislation that the government intends to pursue in the forthcoming parliamentary session (the next year, roughly speaking). Economic growth, inflation, climate change, driverless cars, e-cigarettes… all were mentioned but the long promised reforms to corporate governance were notably absent. 

Five years ago, corporate governance was front and centre following the collapse of Carillion with the government promising to overhaul the audit industry, the accounting regulator and the responsibilities of company directors. However, following various consultations and draft reforms, there is precious little legislation to show for them now. The King's Speech follows hot on the heels of the withdrawal of the draft Companies (Strategic Report and Directors' Report) (Amendment) Regulations 2023 in October. Furthermore, on the same day as the King's Speech, the FRC released a statement that it will only be taking forward a small number of its original 18 proposed revisions to the UK Corporate Governance Code. Over half of the original proposals, including ones relating to ESG and improving diversity have been scrapped.

It seems the tide is turning on attitudes towards governance reforms, with more focus now on reducing the administrative burden on large companies rather than holding them to account. In any event, it is now unlikely that we will see any major reforms to corporate governance this side of the next general election.

It’s another sign of backtracking on plans to strengthen corporate governance following a series of high-profile corporate collapses, including construction firm Carillion and cake chain Patisserie Valerie.