FRC encourages more transparency when reporting against the UK Corporate Governance Code
News types: Codes and Standards Announcements, Guidance, Policies and Responsibilities, Publications
Published: 26 February 2021
The Financial Reporting Council (FRC) has today issued advice for companies on how to report transparently and effectively when departing from certain provisions of the UK Corporate Governance Code.
The Code sets high standards for Corporate Governance. It recognises that companies have differing circumstances and so offers flexibility through its ‘comply or explain’ approach to reporting. The FRC encourages companies to embrace the flexibility offered by the Code so that investors and wider stakeholders benefit from reporting that clearly demonstrates a commitment to good governance, and clearly sets out a company’s circumstances.
It is important that companies:
The Code sets high standards for Corporate Governance. It recognises that companies have differing circumstances and so offers flexibility through its ‘comply or explain’ approach to reporting. The FRC encourages companies to embrace the flexibility offered by the Code so that investors and wider stakeholders benefit from reporting that clearly demonstrates a commitment to good governance, and clearly sets out a company’s circumstances.
It is important that companies:
- Embrace the flexibility offered by the Code and develop bespoke governance processes and practices which raise standards.
- Make it easy for readers to find out which Provisions of the Code they have departed from in their annual report.
- Ensure that they provide full, clear and meaningful explanations for any such departures.