Corporate Governance (overview)

Published: 4 October 2023

6 minute read

The 2018 Corporate Governance Code (the Code) was updated in January 2024 following a limited consultation which concentrated on a limited number of changes. The 2024 Code applies to financial years beginning on or after 1 January 2025. The 2018 Code remains in place until then. The 2024 Code is supported by revised guidance which will be published on 29 January 2024.

The Importance of Corporate Governance

Corporate Governance is the system of rules, practices and processes that are put in place to manage and control a company. It is underpinned by the UK Corporate Governance Code.

Good corporate governance contributes to long-term company performance by helping to build an environment of trust, transparency and accountability. These values help businesses foster long-term investments, financial stability and business integrity.

Businesses with good corporate governance policies see stronger growth, and help contribute to more inclusive societies by ensuring the interests of all stakeholders are balanced.

The UK Corporate Governance Code

The UK Corporate Governance code (the Code) is an important part of UK company law and corporate governance framework. It applies to all premium listed companies on the London Stock Exchange.

The Code is maintained by the FRC and incorporates a set of Principles of good corporate governance. It is supported by a number of more specific Provisions and underpinned by the Financial Conduct Authority's Listing Rules.

The Listing Rules are given statutory authority under the Financial Services and Markets Act 2000. It is required that premium-listed companies disclose how they have applied the Principles of the Code and complied with its Provisions, and they must explain if they have not complied with a Provision. The Code refers to this as 'comply or explain'.

History of the Corporate Governance Code


UK Corporate Governance Code 2024

The revised UK Corporate Governance Code was published on 22 January 2024 and will apply to financial years beginning on or after 1 January 2025, other than provision 29 which will apply to financial years beginning on or after 1 January 2026.

Revised guidance to accompany the Code was published on 29 January 2024 in a new digital format.


Corporate Governance Consultation

Following the consultation on Restoring Trust in Audit and Corporate Governance, in 2022, the government invited the FRC to strengthen the UK Corporate Governance Code in specific areas.

The key objectives were to improve the quality of companies' risk management and internal controls, and board's consideration of corporate governance activity to acheive their company's strategic objectives. We consulted on several other changes to the Code aimed at removing duplication and strengthening or streamlining reporting.

For more information review our Corporate Governance Consultation


Comprehensive Code Review

The revision of the Code took account of work done by the FRC on corporate culture and succession planning, and the issues raised in the Government’s Green Paper and the BEIS Select Committee inquiry.

Apart from giving centre stage to corporate culture and purpose, the 2018 Code Review broadened the definition of governance and emphasised the importance of positive relationships between Shareholders and Stakeholders. It also stressed the significance of independence and constructive challenge in the boardroom.


Audit Updates

Following the introduction of the EU Audit Directive and the Regulation, the Code was amended to ensure that it worked alongside the new legislation.


Risk & Viability

The Guidance on Risk Management, Internal Control and Related Financial and Business Reporting was primarily directed at companies subject to the UK Corporate Governance Code.

The purpose of the guidance was to bring together elements of best practice for risk management; prompt boards to consider how to discharge their responsibilities in relation to the existing and emerging principal risks; and highlight related reporting responsibilities.

Risk & Viability (2014)


The UK Corporate Governance Code

The 2003 update to the Combined Code to include the recommendations of the Higgs Report and the Smith Report was followed by the 2010 review.

In the wake of financial crises that came to a head in 2008-09, the FRC decided to bring forward the review and the Code was renamed the UK Corporate Governance Code. The review concluded, among other things, that more attention needed to be paid to following the spirit of the Code as well as its letter.


Revised Turnbull Guidance

The Turnbull Review Group concluded that the original Turnbull Guidance contributed to an overall improvement to the standard of risk management and internal control, and therefore no significant edits were required.

A small number of amendments were proposed, among them requiring the inclusion in annual reports of information to allow shareholders to understand the principal features of a company's internal control procedures and risk management system.

Revised Turnbull Guidance (2005)


Smith Report

The FRC Group on Audit Committees, chaired by Sir Robert Smith, was tasked with developing the guidance on audit committees in the Combined Code. The group's report codified the role of audit committees. It was subsequently revised and is now known as the Guidance on Audit Committees.

Higgs Review

The Higgs review, conducted by Derek Higgs, was an independent review of the role and effectiveness of non-executive directors and the audit committee. It aimed to improve and strengthen the Combined Code.

While the review backed the existing non-prescriptive approach to corporate governance ( ‘comply or explain’) it also advocated for more provisions with set criteria for the board composition and evaluation of independent directors. This guidance has now been replaced by the Guidance on Board Effectiveness.

Higgs Review (2003)


Turnbull Report

The report, written by the committee chaired by Nigel Turnbull, set out obligations for directors under the Combined Code. The guidance on good practice for listed companies included keeping good internal controls, or having good audits and checks to ensure the quality of financial reporting and catch any fraud before it becomes a problem.

Turnbull Report (1999)


Hampel Report

The Hampel Committee, chaired by Sir Ronnie Hampel, was set up to review the implementation of the Cadbury and Greenbury reports.

The Hampel Report aimed to harmonise, clarify and combine the two sets of recommendations into one Code. It relied on broad principles and a 'common sense' approach, which was necessary to apply to different situations, rather than Cadbury and Greenbury's perceived 'box-ticking' approach.

Hampel Report (1998)


Greenbury Report

The Greenbury Report was published in response to public and shareholder concerns about Directors' remuneration.

The Report was published by the Study Group on Directors' remuneration under the chairmanship of Sir Richard Greenbury. It included Principles of best practice, which encouraged greater visibility of remuneration structures and attached KPIs and the time horizons over which pay is released.

Greenbury Report (1995)


Cadbury Report

The Committee on the Financial Aspects of Corporate Governance, chaired by Sir Adrian Cadbury, developed a set of principles of good corporate governance. These principles were incorporated into the London Stock Exchange's Listing Rules and introduced the principle of 'comply or explain'.

The Cadbury Code was the first Corporate Governance Code in the world. The recommendations focused on the control and reporting functions of boards, and the role of auditors.

Cadbury Report (1992)

The UK Stewardship Code sets high stewardship standards for asset owners and asset managers, and for service providers that support them. It provides the framework for signatories to demonstrate how they are meeting their clients’ and beneficiaries’ needs, and their own commitments, by providing evidence on the activities and outcomes of their stewardship.

The Stewardship Code works in tandem with the UK Corporate Governance Code to underpin high-quality reporting and accountability for investment and governance. Good governance and good stewardship should go hand in hand.

Information about the Stewardship Code and how to become a signatory

Corporate Governance Publications

Codes and guidance
Name AGM Guidance
Publication date 21 July 2022
Type Guidance
Format PDF, 582.2 KB
Name Guidance on Board Effectiveness
Publication date 16 July 2018
Type Guidance
Format PDF, 412.3 KB
Name Best Practice guide to Audit Tendering
Publication date 7 February 2017
Type Guidance
Format PDF, 312.0 KB
Name Guidance on Audit Committees
Publication date 17 June 2016
Type Guidance
Format PDF, 447.1 KB
Name Risk Management, Internal Control and Related Financial and Business Reporting
Publication date 17 September 2014
Type Guidance
Format PDF, 496.0 KB
Annual Review of Corporate Governance
Name Review of Corporate Governance Reporting 2023
Publication date 16 November 2023
Type Report
Format PDF, 3.1 MB
Name Review of Corporate Governance Reporting 2022
Publication date 3 November 2022
Type Report
Format PDF, 7.2 MB
Name Review of Corporate Governance Reporting 2021
Publication date 25 November 2021
Type Report
Format PDF, 6.2 MB
Name Review of Corporate Governance Reporting 2020
Publication date 26 November 2020
Type Report
Format PDF, 1.4 MB
Name Review of Corporate Governance Reporting 2019
Publication date 9 January 2020
Type Report
Format PDF, 486.8 KB
Name Annual Review of Corporate Governance and Reporting 2017/2018
Publication date 24 October 2018
Type Report
Format PDF, 867.9 KB
Research projects
Name The influence of proxy advisors and ESG rating agencies on the actions and reporting of FTSE 350 com
Publication date 15 June 2023
Type Report
Format PDF, 3.4 MB
Name Annex 1 - Questionnaires
Publication date 23 June 2023
Format PDF, 492.5 KB
Name Annex 2 - Interview Guides and List of Interviewees
Publication date 23 June 2023
Format PDF, 586.7 KB
Name FRC Modern Slavery Reporting Practices in the UK 2022
Publication date 25 April 2022
Type Report
Format PDF, 4.0 MB
Name The Wates Corporate Governance Principles for Large Private Companies (February 2022)
Publication date 23 February 2022
Type Report
Format PDF, 2.8 MB
Name Creating positive culture – opportunities and challenges
Publication date 9 December 2021
Type Report
Format PDF, 3.1 MB
Name FRC Board Diversity and Effectiveness in FTSE 350 Companies
Publication date 20 July 2021
Type Report
Format PDF, 12.0 MB
Name FRC Workforce Engagement Report
Publication date 24 May 2021
Type Report
Format PDF, 2.2 MB
Name Changes in Remuneration Reporting Following the UK Corporate Governance Code 2018
Publication date 12 May 2021
Type Report
Format PDF, 1.4 MB
Name Improving the Quality of Comply or Explain Reporting
Publication date 26 February 2021
Type Report
Format PDF, 1.4 MB
Name FRC Climate Thematic – Governance
Publication date 10 November 2020
Type Report
Format PDF, 1.0 MB
Name AGM best practice guidance
Publication date 6 October 2020
Type Guidance
Format PDF, 328.1 KB