The UK Corporate Governance Code and associated guidance

The UK Corporate Governance Code (formerly the Combined Code) sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders.

All companies with a Premium Listing of equity shares in the UK are required under the Listing Rules to report on how they have applied the Combined Code in their annual report and accounts. The relevant section of the Listing Rules can be found at: http://fsahandbook.info/FSA/html/handbook/LR/9/8.

The Code contains broad principles and more specific provisions. Listed companies are required to report on how they have applied the main principles of the Code, and either to confirm that they have complied with the Code's provisions or - where they have not - to provide an explanation.

In May 2010 the FRC issued a new edition of the Code which will apply to financial years beginning on or after 29 June 2010.

 The UK Corporate Governance Code (145 kb)

This follows a review of the Code carried out during 2009 and consultation on a draft of the revised Code that ended in March 2010. Copies of the consultation document and further details of the review can be found at: http://www.frc.org.uk/corporate/reviewCombined.cfm

For financial years beginning before 29 June 2010 the 2008 edition of the Code will continue to apply.

 Combined Code June 2008 (417kb)

Printed copies of both editions of the Code can be obtained free of charge from FRC publications, tel: 020 8247 1264, email: customer.services@cch.co.uk and online at: www.frcpublications.com

The main differences between the 2010 and 2008 editions of the Code are summarised in this report.

 May 2010 Report on Code Consultation (127kb)

Documents associated with  earlier reviews of the Code can be found at: www.frc.org.uk/corporate/reviews.cfm 

Recommendations to institutional investors

When the Code was published in May 2010 it included in Schedule C some engagement principles for institutional investors. This Schedule has now been superseded by the UK Stewardship Code and has therefore been deleted from the Code with effect from 1 August 2010.

Associated guidance

The Turnbull guidance, which provides guidance to companies on how to apply the section of the Code dealing with risk management and internal control (Section C.2), can be found at: www.frc.org.uk/corporate/internalcontrol.cfm

The FRC Guidance on Audit Committees (formerly known as the Smith Guidance), which provides guidance on Section C.3 of the Code, can be found at: http://www.frc.org.uk/corporate/auditcommittees.cfm

In addition the Higgs report contained best practice guidance relating to non-executive directors. While company boards are not required to follow this guidance, it is intended to assist boards when implementing the relevant provisions of the Code.

 Suggestions for good practice from the Higgs Report (118kb)

The Institute of Chartered Secretaries and Administrators (ICSA) is currently updating this guidance on behalf of the FRC. A link to the consultation document containing draft guidance can be found in the attached press notice. Consultation closes on 14 October 2010.