Navigating the New Era of Corporate Governance: Unpacking FRC's Proposed Changes

The Financial Reporting Council (FRC) recently launched a consultation on proposed changes to the UK Corporate Governance Code. This initiative forms part of the broader 'Restoring Trust in Audit and Corporate Governance' reform package. The consultation document outlines the following main areas of focus, reflecting the FRC's commitment to enhance corporate governance standards and practices:

• Strengthening Board Accountability – The Board will be required to disclose in the annual report a declaration of whether the Board can reasonably conclude that the company’s risk management and internal control systems have been effective throughout the reporting period.
• Emphasising the focus on reporting – reporting on controls with a wider scope than financial processes, including sustainability matters and operational & compliance related controls.
• Re-enforcing the need of an Audit and Assurance policy – the A&A policy will need to be developed and disclosed by the Audit Committee.
• Maintaining the Resilience Statement as a legislative requirement – the resilience statement will need to be included in the annual report.

The paper also confirms that the intention is that the revised Code will apply to accounting years commencing on or after 1 January 2025 to allow sufficient time for implementation.

Given these impending changes, organisations are encouraged to start planning now to ensure a smooth transition. For further guidance and support in navigating these changes, please don't hesitate to get in touch with us.

This blog has been contributed by Esther Delgado , For any inquiries or questions, please reach out to her at [email protected].