PCaW backs UK’s Corporate Governance Code proposals requiring boards to give workers a means to raise concerns

5th December 2017

PCaW welcomes proposals by the Financial Reporting Council (FRC) to its UK Corporate Governance Code, which addresses public trust in business.

The main change being proposed in relation to whistleblowing, is that Boards will now be responsible for reviewing whistleblowing arrangements, where previously it was the role of the Audit Committee. The proposal states:

“There should also be a means for the workforce to raise concerns in confidence and (if they wish) anonymously. The board should review this and ensure that arrangements are in place for the proportionate and independent investigation of such matters and for follow-up action."

PCaW Chief Executive Francesca West said, “We wholeheartedly agree with the FRC that a ‘healthy corporate culture is integral to the credibility of a company’ and we work with many organisations and know that they are keen to have clearer guidance so they can feel confident that their internal arrangements are fit for purpose. Moreover, this will put the onus on Boards that have not yet realised the value and importance of ensuring staff can speak up, to do much better.

She added, “We welcome the amendments on arrangements for staff to question wrongdoing. The draft code moves the responsibility for such arrangements from the Audit Committee to the Board and provides a broad definition of matters that staff can question. However, we caution against any emphasis on anonymised reporting, which can be counterproductive to building open and transparent workplaces."

With the aim of strengthening the ‘employee voice’ in the boardroom, the Code requires boards to establish a method for gathering the views of the workforce and suggests three ways this might be achieved: a director appointed from the workforce, a formal workforce advisory panel, or a designated non-executive director.

PCaW will be formally responding to the consultation which closes in February 2018.

Finance Reporting Council Proposed Revisions to the Governance Code