I’ve previously commented on the surprising governance initiatives of the Conservative (yes, Conservative) Prime Minister of the UK. Well, our friends across the pond are at it again – or maybe it’s just more of the same.
Specifically, on April 5, Parliament’s Business Committee issued a series of recommendations contemplating the following:
- The Financial Reporting Council (FRC) should be empowered, among other things, to report publicly on board or individual director failings.
- The FRC should rate companies on governance practices. The ratings would be color-coded (red, yellow and green), and companies would be required to reference them in their annual reports. If you’re thinking of Hester Prynne’s scarlet letter, you’re not alone.
- Companies would be subject to a slew of new rules on pay: