MPs recommend tougher scrutiny for private firms

Private firms should face the same rules on corporate governance as publicly listed companies, a committee of MPs is to recommend.

The changes would force private companies with more than 5,000 defined benefit pension scheme members to abide by the Financial Reporting Council's code. They are aimed at preventing another collapse similar to that of retail chain BHS.

Labour MP Frank Field, the chairman of the work and pensions committee, said the collapse of the high street store was triggered by "gross failures of corporate governance".

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He added: "The finances and leadership of a company with so many people depending on it should be open to scrutiny.

"For a company with a big social and economic footprint like BHS it is simply not enough to be accountable to shareholders - particularly when one shareholder owns most of the stock."

Field's committee "also called for changes that would make directors at private businesses accountable to pensioners through their scheme's trustees", says the BBC.

The MPs' report came as it was revealed that leading city investors will propose the creation of a "sin bin" for companies that overstep the mark on bosses' pay, says the Daily Telegraph.

Under proposals expected to be submitted to ministers this week, a company would automatically face a binding vote on pay at its next annual general meeting if more than a quarter of shareholders protest against pay awards in a given year.