The Wates Principles: Corporate Governance in Large Private Companies

Emiliano Berti, Head of Legal and Compliance, Europe, Nokia Corporation, Italy

On 10 December 2018, the UK’s Financial Reporting Council (FRC) published the final version of the Wates Principles for Large Private Companies. This is the first shot at drafting a corporate governance code for adoption by private companies (the only published corporate governance code in the UK so far being for listed entities) and the latest in a series of steps taken recently in the UK towards increased corporate governance regulation and oversight. The Wates Principles seek to provide assistance to large companies which, following the introduction of the Companies (Miscellaneous Reporting) Regulations 2018 in June 2018, need to start reporting on their corporate governance arrangements; however, the Wates Principles have been published with the hope that they will provide a framework and guidance that can be adopted by smaller private companies as well. After a brief consideration of the UK corporate governance framework, the article will explore if and how the Wates Principles affect and interact with subsidiary governance: a significant number of private companies In the UK are subsidiaries of multinational corporations with separate and, in the absence of legal and regulatory harmonisation, potentially very different parent company governance and requirements. More specifically, the article will focus on whether UK subsidiaries of multinational corporations can benefit from increased local regulatory oversight and the Waters Principles, or whether directors will need to navigate conflicts arising from their local English law duties versus their global/parent company requirements, and how they can reconcile what may appear to be inconsistent priorities.

Emiliano Berti is Head of Legal & Compliance, Europe at Nokia, besides he is serving as President of the Board of Directors at Nokia Italy. Emiliano manages a team of lawyers and contract managers with responsibility for over 60 countries. Before joining Nokia, Emiliano served in different legal roles at General Electric based in Florence, London and Paris and he started his career in private practice working with law firms Carnelutti and McDermott Will & Emery LLP. Emiliano is member of the Advisory Board of Foreign Investors at Confindustria. Emiliano graduated as a lawyer in Italy from La Sapienza University in Rome and he holds a LL.M. from the University of Pennsylvania – Law School and he has been admitted to the bar in Italy. Emiliano has authored several publications and he is an habitual speaker at several international conferences.

Nokia is a Finnish multinational telecommunications and information technology corporation, listed on the New York Stock Exchange and the Helsinki Stock Exchange.