Response to the UK Government’s white paper on corporate governance reform

Ministers on the right line towards building trust, opportunity and prosperity, but fail to address need for professionally-qualified directors

Andrew Harding
Andrew Harding

The Association of International Certified Professional Accountants welcomes the UK Government’s proposals and its continued efforts to improve corporate governance, and strike the right balance between business, workers, society and investors. In particular, the Association is pleased to see that the proposals are closely aligned with its response to the Government green paper, specifically focusing upon maintaining corporate governance on a principled rather than rules-based approach. The Association is, however, disappointed that the need for professionally-qualified directors has not been sufficiently recognised by ministers.

Successful business is critical to the future prosperity of the UK, providing goods and services, and employment, and contributing to society through taxation and more generally. However, executive pay must reflect broad contribution and be linked to performance. These proposals will maintain the UK’s leading position in corporate governance.  We look forward to contributing and supporting the Financial Reporting Council in its update of the Corporate Governance Code.

Andrew Harding FCMA, CGMA, Chief Executive – Management Accounting – at the Association of International Certified Professional Accountants, commented:

“Building better business trusted by society drives our ambition for the management accounting profession. This can only be achieved if the critical role of business in creating wealth and generating value is understood and supported. We will continue to support moves to strengthen the need for boards to link strategy and culture to performance and incentives, and for executive remuneration to reflect performance of the business and all those contributing to its success.”

On restoring confidence in the relationship between business and society, Harding continued:

“We recognise that those in the business community must earn trust through embracing improved and ethically grounded business models that share benefits with society, listen to stakeholders and create long-term sustainable value. We look forward to working with the Government, business and other stakeholder bodies in bringing this about and to supporting this important work on corporate governance reform.”

The Chartered Institute of Management Accountants (CIMA) and the American Institute of Certified Public Accountants (AICPA) formed the Association of International Certified Professional Accountants earlier this year, to drive a dynamic accounting profession worldwide, enhancing resources and tools for the Association’s 650,000 members and students worldwide.