FRC to consult on proposed changes to Corporate Governance Code

The Financial Reporting Council (FRC) has launched a public consultation on proposed revisions to the UK Corporate Governance Code. 

The consultation follows the 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.

According to the FRC, the limited revision is the first to happen for five years, and aims to “enhance its effectiveness” in promoting good corporate governance. 

The proposed review has five main focus points, including revising parts of the code that deal with the need for a framework of prudent and effective controls, and making necessary changes to reflect the responsibilities of the board and audit committee for sustainability and ESG reporting.

It has also proposed amending the code to take account of the new Audit Committee Standard (Audit Committees and the External Audit: Minimum Standard).

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.”

He added: “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.”