Introducing the principles at County Hall, London, he said that the creation of the reporting requirement had been prompted by the collapse of BHS and ‘the number of large private companies currently falling outside the regulatory framework’.

The Wates principles apply to all companies that either have more than 2,000 employees or report a turnover of more than £200m and a balance sheet of more than £2bn, and are not currently required to provide a corporate governance statement as publicly quoted companies are. It will apply non-mandatorily to 1700 companies in the UK.

He pointed that ‘whether the FRC can play a part depends on the results of the Kingman review’, which is due to be published by the end of December 2018 and is expected to be highly critical of the FRC.

The Wates principles were, in his view, not intended to be a box-ticking regime but be ‘inspirational and cause companies to raise their game’.

Janet Williamson, a member of the panel and TUC corporate governance officer, said, ‘It is significant that stakeholder concerns are key to the Wates principles…as soon as you accept that stakeholder principles are essential to good governance, then a standard becomes essential’. She said that ‘the challenge now is to business to put these principles into action’.

Hugh Clark, chairman of the Institute for Family Business (IFB), said that the principles were geared towards developing purpose and leadership within large private businesses. ‘A well-defined and developed purpose is essential to long-term sustainable growth’. Tim Farazmand, chairman for the British private equity & venture capital association (BVCA), said that ‘The good news is that private equity will embrace Wates, because private equity wants good corporate governance.’

Asked by a member of the audience whether the existence of the Wates principles would have prevented the collapse of BHS, Wates replied that ‘if someone is determined to do something, they will do it’, but that the existence of the principles would have created a higher standard of transparency that would have mitigated the effects.

Paul George, executive director of corporate governance & reporting at the FRC, was asked what would motivate companies to adhere to the principles, will take effect on 1 January 2019 but are not mandatory. He replied that stakeholder pressure would be key to their adoption: ‘It will enable stakeholders to reflect on whether they want to support companies by looking at what principles they uphold’.

‘What we firmly believe is that this does allow companies to distinguish themselves in a competitive market’. Farazmand agreed with this point, warning that ‘those that do abide will stand out, and those that do not will be found out’.

Wates reiterated this point when asked whether the principles would have value to creditors as a tool to help them understand who they are lending to: ‘The more competitive advantages businesses can get the better - and this does offer a competitive advantage…many companies will now be judged in the court of public opinion’.

Outgoing chairman of the FRC, Stephen Haddrill, who is due to leave the position as soon as a replacement is found, was not present at the event.

Report by James Bunney