Grosvenor Group Limited (‘Grosvenor’), one of the world’s largest privately-owned international property groups, has contributed to the consultation on the Wates Corporate Governance Principles for Large Private Companies.
In our submission to the Financial Reporting Council, available here, we commented on a number of elements. The key points of our contribution are summarised below:
We believe that strong corporate governance practices are of critical importance to the long-term success of any organisation, regardless of its ownership structure. As such, we are highly supportive of the Principles and associated guidance. We have, for many years, chosen to adopt strong corporate governance processes, defined largely by reference to the UK Corporate Governance Code, but ultimately adapted where appropriate to suit our specific circumstances. We welcome the Principles and guidance as a useful tool and clear statement of good practice for corporate governance, specifically in large private companies.
We belied that the Principles should apply to private incorporated businesses which meet the size criteria. This should apply irrespective of the number of legal entities between which the business is split. The current proposals seem to allow avoidance on the basis of corporate fragmentation.
We must avoid a “tick-box” approach to reporting. Private companies should be allowed the flexibility to report on their approach to corporate governance in a holistic way, providing explanation and drawing on examples which might demonstrate the combined application of a number of different Principles, rather than necessarily reporting on a Principle-by-Principle basis with a separate example for each Principle. The latter may, in some cases, lead to more of a “tick box” approach.
We feel that an ‘apply and explain’ approach is appropriate, given the wide range of different ownership structures for private companies, as this will allow each organisation to adopt and articulate an approach to application of the Principles that is most appropriate to its own particular circumstances.
We believe it is important to have clarity on the respective roles and responsibilities of the board and the shareholders. Whilst the shareholders have a role in helping to define the company’s purpose and values, the delivery – including through the company’s strategy and by means of embedding and maintaining the culture through the organisation – should remain the responsibility of the board.
We feel it is important to recognise that our stakeholders include future stakeholders and therefore whilst it is important to engage with existing stakeholders it is also important to consider the longer term impact, particularly upon the communities in which we operate, many years into the future.
For more information contact:
Grosvenor Group Media Relations Manager
T +44 0(20) 7312 7008 / M +44 (0)7919 321 422
Grosvenor Group Communications Director
T +44 (0) 20 7312 6435 / M +44 (0) 7736 383 262
Notes to editors
About Grosvenor Group:
Grosvenor Group is one of the world’s largest privately-owned property companies. We develop, manage and invest in property in more than 60 cities around the world.
Through the activities of Grosvenor Britain & Ireland, Grosvenor Americas, Grosvenor Asia Pacific and Grosvenor Europe we diversify the Group’s property portfolio by geography, sector, activity, currency and management teams.
Our Indirect Investment business further diversifies the Group’s property interests beyond the expertise and strategies of our four regional Operating Companies. It invests Grosvenor’s capital in Africa, Australia, Europe and North and South America.
Grosvenor Group’s purpose is to deliver lasting commercial and social benefit. To live up to this ambition, for over 10 years we have adopted an approach we call Living Cities which aims to guide and inspire our property activities.
Achieving strong commercial returns enables our activities to be enduring. Applying our expertise with a far-sighted perspective to improve properties and places provides a positive impact on communities, neighbourhoods and cities.
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