New guidance: New guidance published to help limited companies engage with stakeholders
The Institute of Chartered Secretaries and Administrators: Governance Institute (ICSA) and the Investment Association have jointly published guidance to help company boards engage with company's stakeholders, such as employees, suppliers, customers, third sector organisations and regulators.
Company directors are subject to legal duties and responsibilities under company law, including having regard to the interests of stakeholders outside the company. Who these stakeholders are depends on a company's size, industry and location.
A new ICSA guidance note, The Stakeholder Voice in Board Decision Making, aims to 'assist boards in thinking about how to ensure they understand and weigh up the interests of their key stakeholders when taking strategic decisions'. It sets out ten principles to help boards take decisions about, for example, 'the products or services it provides, [its] strategic direction, its long-term health, and its relationship with its workforce and the society in which it operates'.
Given that all directors are subject to the same statutory duties, the guidance is helpful for companies of all sizes.
The guide is free, but you must register with the ICSA (if not already registered) to download it.
Since the guide was published, the Government has responded to its recent green paper consultation on corporate governance reform, and set outs its proposed changes to corporate governance. Proposals include new rules to encourage companies to engage with stakeholders more effectively. The guidance should, therefore, ideally be read in conjunction with the proposed changes.
The guidance will be reviewed and, if required, updated when the proposed changes come into effect in June 2018, and reviewed again in any event in 2019.
Visit the ICSA website and register in order to download a free copy of the guidance
Read the government proposals on corporate governance here
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