UK FRC Governance Code Review

On May 24, UK FRC consulted on corporate governance code revisions.

  • UK FRC published a consultation paper on revisions to the corporate governance code.
  • Also issued supporting documents: draft revised version with tracked changes; clean version of draft code; summary of draft secondary legislation on corporate reporting.
  • Follows FRC Jul. 2018 issued corporate governance code fit for the future, see #36618.
  • Follows UK GVT May 2022, detailed plans for overhaul to restore trust, see #139228.
  • Summary
  • Limited revision is the first for 5 years, to enhance promotion of corporate governance.
  • Follows GVT response to restoring trust in audit and corporate governance white paper.
  • It identified reforms on director responsibility for internal control, risk, audit, reporting.
  • Focus Areas
  • Revisions to sections dealing with the need for prudent and effective control framework to provide a stronger basis for reporting on, and evidencing, effectiveness.
  • Updates that reflect board and audit committee responsibility for sustainability and ESG reporting and assurance, in accordance with company audit and assurance policy.
  • Amendments that reflect Audit committees and the external audit: minimum standard.
  • Improve functioning of comply-or-explain where reporting is currently weaker.
  • Alignment with changes to legal and regulatory requirements in UK GVT white paper response, including strengthened reporting on malus and clawback arrangements.
  • Also review existing supporting guidance on: audit committee; board effectiveness; risk management, internal control and related financial and business reporting.
  • Next Steps
  • Webinar on May 30, 2023 14:00-15:00 BST, will examine proposed revisions in detail.
  • UK FRC will also host nine roundtables, which will take place between Jun. 21-Jul. 11, 2023, and cover three main areas: internal controls; boards; leadership and reporting.
  • Effectiveness
  • Comments are invited until Sep. 13, 2023.

Regulators UK FRC
Entity Types Auditor; Corp
Reference CP, PR, 5/24/2023; ESG
Functions Audit; Compliance; C-Suite; Reporting; Risk; Treasury
Countries United Kingdom
Category National Regulator
State
Products Corporate; Equity
Regions EMEA
Rule Type Proposed
Rule Date 5/24/2023
Effective Date 9/13/2023
Rule Id 173624
Linked to N/A
Reg. Last Update 5/24/2023
Report Section UK

Last substantive update on 05/25/2023