Corporate Governance
The question
To ask the Secretary of State for Business and Trade, what recent assessment his Department has made of the potential implications for its policies of international best practices in embedding stakeholder governance into company law.
Answered by Justin Madders
Section 172 of the Companies Act 2006 requires company directors to have regard in their decision-making to the interests of their employees, customers and suppliers, and also to the impact of the company’s operations on the community and the environment. Large companies must report annually on how their directors have met this duty. Section 172 also enables companies to amend their articles of association to adopt a purpose of their own choosing, which may include placing particular weight on environmental, stakeholder or other interests.
The United Kingdom Government is an active member of the OECD Corporate Governance Committee which regularly discusses and shares good practice on corporate governance.
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