FBUK addresses Good Governance in Disruptive Times

FBUK addresses Good Governance in Disruptive Times

Family Business UK were delighted to host an open and honest roundtable discussion on ‘Good Governance in Disruptive Times’ in London yesterday, the 6th November 2024.

Kindly hosted by FBUK Corporate Partners PwC and with expert contributions from both PwC and Boodle Hatfield, this session provided senior family business leaders with an opportunity to consider governance challenges faced by a broad range of roles and generations within UK family businesses.

After reframing external risks as opportunities to create agility in business, we explored ‘what is good governance in practice?’

Our panel, including Steve Rigby, James Perry and Sian Steele, expertly moderated by Sophie Ashburton, sought to debate what is most important in relation to good governance?

What might get in the way of good governance? And why are family businesses, at their best, uniquely set up to be exemplars of good governance?

Steve Rigby, CO-CEO of Rigby Group PLC, discussed the importance of family board’s aligning their views so that a message delivered to the executive is heard as one voice. Steve advocated for independent advice/support to help manage the emotion inherent in family business, so that families can better communicate what they wish to achieve.

James Perry, co-Founder and Co-Chair of COOK, explained what it means to be a purposeful organisation and the pride he felt in changing the articles of association to show their commitment to good governance.

James gave tangible examples such as the decision to be part of the Living Wage Foundation and how honesty and transparency created authentic conversation.

Sian Steele, portfolio NED, shared examples of how family businesses can adapt to roll with the punches, pivot fast if they need to or hold hard. Sian spoke about how being direct in the right way (radical candour) is helpful in bringing up things that appear painful to talk about, but are necessary.

The roundtable discussion which followed, conducted under Chatham House Rule, explored a number of individual challenges being faced currently within attendee’s family businesses.

The strong culture of honesty amongst family business meant that attendees felt safe to share in-depth and openly, so that they could gain the support they needed.

Thoughtful input from both subject matter experts and perspectives from other FBUK members, gave practical advice on how to manage the difficulties, learnt from their own experience in similar situations.

Some of the key takeaways from the day included:

  • Getting the formality of governance ‘just right’ is hard work and different for every family, but informal Friday Family Lunch or Tuesday Supper Club may be a step in the right direction.
  • Reconsider the output you would like and re-frame the conversation so that communication is easier and more beneficial.
  • Purpose and aspirations of stakeholders can be a rich and emotive subject, used to engage, find a commonality and drive action for both family and business.

A general consensus about communicating well, whether around the kitchen table or around the boardroom table, meant an investment in relationships which takes a first step towards good governance.

Further Reading on Good Governance

Some “tried and tested” tools recommended by our delegates, in the room, to help understand better ways of communicating included:

  • Insights
  • Love languages
  • See-me
  • Strength finder 2.0

For those interested in some further reading, delegates shared a number of powerful book recommendations including:

  • Radical Candour
  • The fearless organisation
  • Hug of War
  • Who moved my cheese?
  • I’m ok, you’re ok

The FBUK Member Resource Centre

FBUK Members can find further exclusive resources, including our unique digital tool & model – Family Business Life Stages, within the FBUK Members Resource Centre,

As part of FBUK’s support to the sector, the public can access range of topical, “open” expert resources on the FBUK website here.

FBUK shall be running many more events in 2025 to help our members explore best practice and knowledge share, on topics of material import to family business.

FBUK Programmes & Events
View the FBUK Programmes & Events calendar here.

 

Large private companies continue to favour Wates Principles

Large private companies continue to favour Wates Principles

Today the Financial Reporting Council published its second assessment of the quality of reporting from private companies who have chosen to follow the Wates Principles.

The research, conducted by the University of Essex, shows that the Wates Principles continue to be the most widely adopted corporate governance code among large private companies.

Of the 1,815 large private companies in scope of the research, 547 (30%) chose to apply the Wates Corporate Governance Principles in 2021/22, with a combined annual turnover totalling more than £850 billion.

Sir James Wates CBE, said:
“I’m once again encouraged to see that more large private companies are choosing to report against the Wates Principles than any other option.”

“The improvement in the reporting quality we’ve seen in today’s report, while good news, shouldn’t distract companies from the need to reduce boilerplate reporting, which remains a primary concern. I urge boards to reflect on today’s report with open minds ahead of their next reporting cycles.”

Mark Babington, FRC’s Executive Director of Regulatory Standards, said:
“The popularity of the Wates Principles continues amongst private companies, who I hope put this report to good use in their efforts to produce meaningful and company specific reports.

“The research highlights the need for increased transparency and accountability among large private companies, particularly as they are a driver of growth in the UK and have a significant impact on the economy and on wider stakeholders.”

While there were some improvements in certain disclosure areas compared to 2019/20, companies continue to struggle with providing meaningful disclosures around key areas. These include defining company purpose, connecting that purpose to strategy, culture and values, and explaining how stakeholder engagement impacts board decision-making.

The report also suggests there is an over-reliance on “boilerplate” disclosures being used rather than disclosures that provide company-specific context. High levels of similarity were found between the corporate governance statements of different companies, and also between reports by the same company in different years.

Click here to download and read the full FRC report and FRC Press Release: “Large private companies continue to favour Wates Principles”.

Listen to the FRC’s “In Conversation” Podcast
The FRC’s latest In Conversation podcast episode features Sir James Wates OBE, Chair of Family Business UK, Kate O’Neill, Director of Stakeholder Engagement & Corporate Affairs, and Maureen Beresford, Acting Director of Corporate Governance and Stewardship at the FRC.

Join the panel as they explore today’s report and discuss the Wates Principles’ flexibility, challenges in meaningful disclosure, and the importance of stakeholder engagement.

Click here to access and listen to the Podcast.