News July 2016 FRC comments on Executive Remuneration Working Group’s final report

FRC comments on Executive Remuneration Working Group’s final report

26 July 2016

PN 44/16

Stephen Haddrill, Chief Executive of the Financial Reporting Council comments on the findings of the final report of the Executive Remuneration Working Group:

"Corporate governance in the UK has a justifiably strong global reputation but this and confidence in business generally is being tarnished by the actions of those companies which are doing too little to recognise legitimate shareholder and public concerns on remuneration.  Investors have a key role in holding companies to account and we therefore welcome this thoughtful report. The FRC will consider the recommendation on the need for RemCo chairs to have the skills and experience to undertake the role as part of a wider review of measures we can take to address public concern.

“The FRC welcomes the Government's focus on improving corporate conduct including on remuneration and its determination to strengthen the voice at the Board of a wider group of stakeholders. This issue was addressed in the FRC’s recent report  'Corporate Culture and the Role of Boards(PDF), which noted how continuing inconsistent alignment between executive remuneration and company performance, and between the remuneration of senior executives and employees in some companies has led to an increasing lack of public confidence. Boards and remuneration committees must do more to link culture and values to the design of remuneration policies."
Notes to editors:
  1. The FRC is responsible for promoting high quality corporate governance and reporting to foster investment.  We are the UK competent authority for audit and set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work.  We represent UK interests in international standard-setting.  We also monitor and take action to promote the quality of corporate reporting and auditing.  We operate independent enforcement arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.