Identify how a UK company could convince shareholders and the Essay

Identify how a UK company could convince shareholders and the Essay

Identify how a UK company could convince shareholders and the regulator that it had complied with the five main principles of the UK Corporate Governance Code - Essay Example More importantly, their neutrality and lack of vested bias should be illustrated their lack of previous/present personal/professional connections. By satisfactorily adhering to this principle, a UK company can convince shareholders and the regulator about its compliance with the Code. The second main principle relates to executive remuneration. The growing discontent with the trend of exorbitant top-executive compensation has brought the issue to the notice of Financial Reporting Council. Consequently, the principle of ‘performance related pay’ is included in the Code, whereby the rules already stated in the Companies Act of 2006 will be enacted more effectively. The principle also suggests the ideal composition of the remuneration committee, where non-executive directors will play a major role, especially in ascertaining director remuneration.