What is corporate governance in simple terms?

Corporate governance is the system of rules, practices, and relationships by which a company is directed and controlled. It sets out how decisions are made, who is accountable to whom, and how the interests of shareholders, the board, management, and wider stakeholders are balanced. In short, it is how an organisation makes sure it is run properly, honestly, and in the long-term interests of the business.

What are the main principles of corporate governance?

The widely accepted principles are accountability, transparency, fairness, and responsibility. Accountability means those running the company answer for their decisions; transparency means clear, honest disclosure; fairness means treating shareholders and stakeholders even-handedly; and responsibility means acting ethically and complying with the law. Good governance also stresses effective board leadership, sound risk management, and independent challenge.

What is the UK Corporate Governance Code?

The UK Corporate Governance Code is the main framework of governance standards for premium-listed companies, maintained by the Financial Reporting Council. It works on a comply-or-explain basis, meaning companies either follow its provisions on board leadership, division of responsibilities, composition, remuneration, and audit, or explain publicly why they have not. It is best practice guidance rather than hard law, but listed firms are expected to take it seriously.

What is the difference between corporate governance and compliance?

Compliance is about following the specific laws and regulations that apply to a business. Corporate governance is broader: it is the whole system of leadership, accountability, and control that guides how the company is run, including how it goes beyond the legal minimum to act responsibly. Compliance is one output of good governance, not a substitute for it.

Why is corporate governance important for small companies too?

Governance is not only for large listed firms. Even a small or growing company benefits from clear roles, honest reporting, sensible risk oversight, and a board or directors who challenge decisions. Directors of any UK company have legal duties under the Companies Act 2006. Good governance builds trust with investors, lenders, customers, and staff, and it makes a business more resilient as it scales.

Modern Slavery Act Compliance: A Practical UK Guide

Modern Slavery Act compliance rests on one core duty: larger businesses must publish an annual statement setting out what they are doing to stop slavery and human trafficking in their operations and supply chains. This guide explains who the duty applies to, what the statement must contain, how to get it approved, and the practical steps that turn a paper exercise into genuine assurance.

It sits alongside our guides to corporate compliance and Bribery Act compliance, and complements a strong code of conduct.

Who has to comply

The duty comes from section 54 of the Modern Slavery Act 2015, the transparency in supply chains provision. It applies to any commercial organisation that supplies goods or services, carries on any part of its business in the UK, and has a total annual turnover of £36 million or more. Turnover is measured for the organisation and its subsidiaries together. If you meet that threshold, you must prepare a slavery and human trafficking statement for each financial year.

What the statement must contain

The statement should set out the steps the organisation has taken during the financial year to ensure slavery and human trafficking are not taking place in its business or supply chains. The Act suggests six areas to cover, and good statements address each one honestly:

The organisation's structure, business and supply chains.
Its policies on slavery and human trafficking.
Its due diligence processes.
The parts of the business and supply chain where there is a risk, and the steps taken to assess and manage it.
Its effectiveness, measured against suitable performance indicators.
The training available to staff.

A statement that simply says the right things without evidence is weak. Buyers, investors and campaigners increasingly compare statements year on year, so vague or unchanged wording is quickly noticed.

Approval, signature and publication

The rules on sign-off matter as much as the content. The statement must be approved by the board of directors (or equivalent management body) and signed by a director. It must then be published on the organisation's website with a prominent link on the homepage. Statements are also expected to be filed on the UK government's online modern slavery statement registry, which makes them searchable in one place. Publish within a reasonable period after the financial year end; six months is the widely accepted benchmark.

Consequences of getting it wrong

There is currently no direct financial penalty for failing to publish, but the Secretary of State can seek an injunction through the courts to compel compliance. The bigger risks are commercial and reputational: lost tenders, failed supplier audits, investor pressure and public criticism. Treating the statement as a genuine account of your due diligence, rather than a compliance formality, is what protects the business.

Building a compliant programme

Map your supply chain and identify higher-risk sectors and geographies, set clear supplier expectations in contracts and a supplier code, run proportionate due diligence, train procurement and HR teams, and give workers a route to raise concerns. Review the statement each year so it reflects real progress, not last year's copy.

Frequently Asked Questions

Who must comply with the Modern Slavery Act?

Commercial organisations that supply goods or services, operate at least partly in the UK, and have a total annual turnover of £36 million or more must publish an annual slavery and human trafficking statement under section 54.

What is a modern slavery statement?

It is an annual public statement setting out the steps an organisation has taken to ensure slavery and human trafficking are not present in its business or supply chains, covering areas such as structure, policies, due diligence, risk and training.

Does the statement need to be signed?

Yes. It must be approved by the board or equivalent body and signed by a director, then published with a prominent link on the organisation's website homepage and filed on the government registry.

What is the penalty for non-compliance?

There is no direct fine for failing to publish, but the government can seek a court injunction. The main consequences are reputational and commercial, including lost contracts and investor scrutiny.

How often must a modern slavery statement be published?

Once for every financial year, ideally within six months of the year end, with each new statement showing genuine progress rather than repeating the previous one.