A privately-owned business does not sell its shares to the public via stock markets, but can exchange shares privately (typically to employees or members).
The government’s plans to “consult on” strengthening the governance of privately-owned businesses have been under the spotlight following the collapse of BHS and Carillion, which endangered the jobs and pensions of thousands of employees.
So what’s actually happened? Well, in August 2017 the government published its response to the consultation on corporate governance reform, stating its intention to invite the Financial Reporting Council (FRC) to work with other groups in developing a voluntary set of corporate governance guidelines. In January 2018, Business Secretary Greg Clark announced that a 13-member industry group this indeed start the process (with representatives from the FRC, as well as the Institute of Directors, the CBI, and headed by James Wates CBE, the chairman of the Wates Group).
As a result, a new voluntary corporate governance code for privately-owned businesses is planned for the summer of 2019. In addition, new disclosure and reporting requirements for companies with over 2,000 employees or turnover greater than £200 million and a balance sheet of £2 billion will be supported by legislation.
All of which means that, given the work that has been done and that this pledge was only to “consult” (not to commit to action either way), this policy has been delivered.
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