How Corporate Governance Focuses on Stakeholders: A Review of Practice in the UK

Abstract

The traditional shareholder primacy approach has been challenged, and this thought has steered UK practice towards a more enlightened perspective. There are increasing calls for better information on how companies are having regard for their stakeholders and how key decisions take their perspectives into account. New regulatory requirements, including the introduction of the Section 172 statement and changes to the UK Corporate Governance Code and the Guidance on the Strategic Report in particular, have driven companies to increase reporting on their stakeholders. Nevertheless, in the absence of accountability mechanisms for directors, these rules have proved to play a limited role.