FRC Launches Consultation on Revision to the Corporate Governance Code
News types: Consultation Announcement, Generic Announcement
Published: 24 May 2023
The Financial Reporting Council (FRC) has today launched a public consultation on proposed revisions to the UK Corporate Governance Code. This follows the UK Government's response to the White Paper, Restoring Trust in Audit and Corporate Governance, which identified areas of reform related to a particular focus on directors' responsibilities for internal control, risk, audit and corporate reporting.
This limited revision of the Code is the first for five years and it aims to enhance the Code's effectiveness in promoting good corporate governance. There are five primary areas of focus:
- Revising those parts of the Code that deal with the need for a framework of prudent and effective controls to provide a stronger basis for reporting on and evidencing their effectiveness.
- Making necessary revisions to reflect the responsibilities of the board and audit committee for sustainability and ESG reporting and appropriate assurance in accordance with a company's audit and assurance policy.
- Amending the Code to take account of the new Audit Committee Standard (Audit Committees and the External Audit: Minimum Standard).
- Improving the functioning of comply-or-explain where reporting is currently weaker, taking account of recently published FRC research and reports.
- Updating the Code to ensure that it aligns with changes to legal and regulatory requirements as set out in the Government's response to the White Paper, including strengthening reporting on malus and clawback arrangements.
The FRC will also review the existing guidance which supports the Code: Guidance on Audit Committees, Guidance on Board effectiveness, and Guidance on risk management, internal control and related financial and business reporting. The public consultation will also be supported by a wide range of stakeholder outreach and information.
Sir Jon Thompson, CEO of the FRC, said:
"We are pleased to launch this consultation on the proposed revisions to the Corporate Governance Code.
"Good corporate governance contributes to long-term company performance by helping to build an environment of trust, transparency, and accountability necessary for fostering long-term investment, financial stability, and business integrity. Enhancing the Corporate Governance Code will meet the needs of all corporate stakeholders, including investors, employees and suppliers, and boost the resilience of the UK economy, ensuring it continues to attract talent and investment. We look forward to receiving feedback from stakeholders and using this feedback to continue restoring trust in audit and corporate governance."
The FRC welcomes comments on the revised Code from all those with an interest. Comments on the questions set out in this consultation document are requested by Wednesday 13 September 2023 should be sent by email to [email protected].
Join us for a webinar on Tuesday 30 May, 14:00-15:00 when we'll be delving into the proposed revisions in more detail.
We will also be hosting a series of roundtables, which will focus on three main topics:
- Internal controls (including the resilience statement and viability, and risk management and internal controls)
- Boards (including diversity, over-boarding and nominations committees)
- Leadership and reporting (including sustainability, culture, strategy, and impacts and outcomes reporting)
Each session will also allow time for more general comments.
Please contact [email protected] if you would like to attend any of sessions below. Due to limited capacity we will only be able to allow one member per organisation for each roundtable.
| Date | Time | Roundtable | Location |
|---|---|---|---|
| 21 June | 10:00 – 11:30 | Boards roundtable | Online |
| 22 June | 13:30 – 15:00 | Leadership and reporting roundtable | Online |
| 27 June | 10:00 – 11:30 | Internal controls roundtable | Online |
| 28 June | 14:00 – 15:30 | Boards roundtable | Online |
| 29 June | 13:00 – 14:30 | Leadership and reporting roundtable | In person |
| 4 July | 13:00 – 14:30 | Internal controls roundtable | Online |
| 5 July | 13:00 – 14:30 | Leadership and reporting roundtable | Online |
| 6 July | 09:30 – 11:00 | Boards roundtable | In person |
| 11 July | 11:30 – 13:00 | Internal controls roundtable | In person |