The Government has published new corporate governance reporting requirements for private companies and unlisted plcs in the UK.
Under the new requirements, all private companies and unlisted plcs with more than 250 UK group employees must disclose how directors have engaged with employees and had regard to employee interests in their directors’ report. Additionally, they must explain in their strategic report and publish on their website how the directors promote the success of the company for the benefit of its members as a whole.
If, however, disclosing details about impending matters in the course of negotiation could be seriously prejudicial to the company interests, then the directors do not need to provide the information.
Large Private Company
A large private company is defined as companies who meet at least two of the following criteria in the relevant financial year:
- Turnover of more than £36 million
- Balance sheet total of more than £18 million
- More than 250 employees
All large private companies must also consider whether to comply with the forthcoming voluntary Wates corporate governance principles. This applies to large private companies who are not already subject to a corporate governance disclosure requirement and satisfies at least one of the following criteria:
- An annual turnover exceeding £200m and a balance sheet total of more than £2 billion; or,
- More than 2,000 employees.
The Government aims to finalise the Wates Principles in December 2018 to align with the introduction of the new reporting obligations starting on or after 1 January 2019.