FRC reports high level of implementation of key Corporate Governance provisions

News types: Publications

Published: 14 December 2011

FRC PN 347
The Financial Reporting Council (FRC) today publishes its first analysis of how the two codes under its supervision are being implemented – the UK Corporate Governance Code for listed companies, revised in 2010, and the UK Stewardship Code for investors, launched in the same year.

The report reveals the high level of take up of the new provisions announced last year. For example, 80 per cent of FTSE 350 boards have put all their directors up for annual re-election, demonstrating the value of the UK Corporate Governance Code in promoting behavioural change in the boardroom.

The FRC is pleased that over 230 asset managers, asset owners and service providers signed up to the Stewardship Code in its first year, including most of the major investors in UK equities. The report highlights evidence that the quality of engagement between investors and company boards is improving in certain areas, for example in discussions around corporate risk. The FRC believes this is a solid platform on which further progress should be made in the coming year.

Commenting on the report FRC Chairman Baroness Hogg said:

“The UK has a long tradition of pioneering developments in corporate governance and a strong track record of driving up standards. The response from companies and investors indicates a real commitment to making the code-based system work. Our approach allows for both innovation and the spreading of best practice throughout the market.

“With the Stewardship Code the UK is breaking new ground. As the providers of risk capital it is vital that shareholders are properly engaged with companies. We will measure the success of the Code on the basis of whether behavioural change occurs: the acid test will be whether companies report better levels of dialogue with investors on issues such as business strategy, risk and succession planning.

“I am pleased that this report shows that we are moving in the right direction. Our ‘comply or explain’ model encourages the changes in behaviour and governance practice that helps to underpin confidence in the UK’s capital market”.


The FRC will make limited changes to both Codes during 2012 designed to promote further behavioural changes and to strengthen the dialogue between companies and their investors.

Read or download the report - Developments in Corporate Governance 2011 (PDF).

Notes to Editors

  1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.

Document created under a former FRC operating body.

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