The Financial Reporting Council (FRC) is seeking views on revisions to the UK Corporate Governance Code. In a consultation document published in December 2017, the FRC sets out a number of proposed changes to the Code as requested by the government, including a new requirement for companies to have a mechanism for consulting employees.
The proposed changes would also extend recommended minimum vesting and post-vesting holding periods for executive share awards from three to five years, and require the chairs of remuneration committee to have a minimum of 12 months’ experience served on a RemCo. A revised code, if agreed, would also specify the steps companies should take when they encounter significant shareholder opposition to executive pay policies and awards. The consultation document also gives advance notice that the FRC will consult on changes to the UK Stewardship Code in 2018.
Commenting on the proposed revisions, Peter Cheese, chief executive of the CIPD, said:
‘We strongly support the proposal to broaden the role of the remuneration committee to oversee pay and incentives across the wider workforce rather than just focusing on executive pay. This is an important step in encouraging businesses to be more active in capturing and acting on their people data and for boards and the remuneration committee to improve their understanding and oversight of people data.’