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Codes and Standards Committee

The Codes & Standards Committee is responsible for advising the FRC Board on maintaining an effective framework of UK codes and standards for Corporate Governance, Stewardship, Accounting, Auditing and Assurance, and Actuarial technical standards. Codes & Standards Committee also advises on influencing the wider regulatory framework and on the FRC’s research programme. It advises the FRC Board on the Annual Plan for Codes and Standards work and for making appointments to, and overseeing the work of, the Councils.  It pays special attention to identifying cross-cutting issues that the FRC needs to tackle, looking across the coverage of individual codes and standards, identifying emerging risks and ensuring work is in hand to manage them. It advises the Board on corporate governance questions. It also decides those matters delegated to it by the Board, for example, on some international issues. 
The Committee comprises FRC Board members together with others with particular technical expertise, including practising professionals. 
The FRC Board and the Codes & Standards Committee are advised by three Councils covering Accounting (including both accounting and narrative reporting), Audit & Assurance and Actuarial work.  These are an important part of the decision-making structure.  Their advice is put fully to the FRC Board.  The Board member chairing each Council is responsible for submitting the Council’s advice to the Board. 

Codes and Standards Committee Terms of Reference

1. Membership

The Codes & Standards Committee is a Committee of and shall be appointed by the Board of Directors. Membership of the Committee shall comprise:

  • Chair of the Codes & Standards Committee
  • Executive Director of Corporate Governance & Reporting
  • Chair of the Corporate Reporting Council
  • Chair of the Audit & Assurance Council
  • Chair of the Actuarial Council
  • Other Non-Executive Directors of the FRC
  • Other Committee members 

No member of the Committee shall be a member of the Conduct Committee or a practising auditor or an individual who has during the previous 3 years:

   i. carried out statutory audits;
   ii. held voting rights in an auditing firm;
   iii. been a member of an administrative management or supervisory body of an audit firm; or
   iv. been a partner, employee or otherwise contracted by an audit firm.

2. Quorum

The quorum for Committee meetings shall be 5 Committee members.

3. Secretary

The Company Secretary or his/her nominee shall act as Secretary of the Committee (the Secretary).

4. Frequency of Meetings

The Committee shall meet at least 6 times a year or as required at the call of the Chair.

5. Attendance at Meetings

Only members of the Committee shall have the right to attend Committee meetings. However other individuals may be invited to attend all or part of any meeting as and when appropriate.

6. Notice of Meetings

Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed and supporting papers, shall be forwarded to each member of the Committee and any other person required to attend, no later than 5 working days before the date of the meeting.

7. Minutes of Meetings

The Secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance.  Minutes of Committee meetings shall be circulated to all members of the Committee. Any decision of the Committee to issue guidance will be published, together with the reasons for that decision on the FRC website.

8. Responsibilities

The Committee shall:

  • Advise the Board on maintaining an effective framework of UK codes and standards for governance, corporate reporting, auditing and actuarial work;
  • Advise the FRC Board on corporate governance matters, including proposed changes to the UK Corporate Governance Code and the Stewardship Code;
  • Approve for issue guidance on the application of codes and standards for governance, corporate reporting, auditing and actuarial work;
  • Recognise SORP-making bodies and approve certain FRC statements on SORPs;
  • Identify the current, emerging and potential risks to the quality of corporate governance and reporting in the UK;
  • Assess the risks to the quality of corporate governance and reporting in the UK and approve the adequacy of actions to mitigate those risks;
  • Ensure that codes and standards are developed in an open and transparent manner with the full involvement of market participants; 
  • Monitor international developments to ensure appropriate and effective UK input into international standard setting;
  • Agree and/or recommend, as appropriate, policy positions to the FRC on matters where the FRC seeks to influence other standard setters;
  • Consider and respond to requests for advice from the Conduct Committee, having taken the advice of one or more of the Councils if appropriate;
  • Approve operating plans for the FRC’s codes and standards activities and oversee the quality of work and delivery of the principal elements of those plans;
  • Provide input to the FRC Annual Plan having taken the advice of the Councils;
  • Oversee the work of the Councils in accordance with the strategic direction provided by the FRC Board, ensuring that the resources of the whole of the FRC relevant to a particular issue are properly deployed;
  • Appoint members to the Corporate Reporting, Audit & Assurance and Actuarial Councils;
  • Oversee the appointment of any groups by the Councils;
  • Perform such other functions as shall be determined by the Board from time to time. 

9. Reporting Responsibilities

The Committee Chair shall report to the Board on the Committee’s proceedings at each Board meeting. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit.

The Committee Chair shall make a statement in the FRC Annual Report about its activities including the frequency of, and attendance by members at, Committee meetings.

10. Other

The Committee shall review its own performance and terms of reference and the performance and terms of reference of the Councils from time to time and report to the Board and shall implement and/or recommend any necessary changes.

Approved by the FRC Board with effect from 17 June 2016