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The Association of Chartered Certified Accountants (ACCA) has commended the Financial Reporting Council’s (FRC) proposed changes to corporate governance code.
ACCA believes that the changes proposed in the FRC consultation, will support companies in facing today’s challenges.
It also believes that the changes are even more necessary in the face of recent speculation that the UK government may be shelving plans for legislation in support of audit and corporate governance reform.
ACCA is calling on the FRC to ensure companies disclose the methodology and results of assessments.
This is so shareholders and stakeholders can ensure that companies’ purpose, value, strategy and risk assessments are aligned.
Corporate governance challenges were identified by ACCA members from the onset of the Covid-19 pandemic.
These issues have been exacerbated by the need for extra resources to be invested and by the exponential change and disruption which organisations are facing.
Maggie McGhee, executive director for Strategy and Governance at ACCA, said: “ACCA commends the FRC for the changes set out in the draft revised Corporate Governance Code. These revisions should deliver more outcomes-based reporting.
“Corporate culture will be crucial if the proposed revisions are to drive change and add value. The roles, skills and composition of the board are crucial factors in influencing the behaviours and mindsets needed to meet the organisation’s objectives.”
Mike Suffield, director, Policy and Insights, added: “We agree with the overarching purpose of these changes to encourage companies to provide more transparency over their systems of risk management and internal controls and how effective they are in practice.
“In the context of the increasing importance of non-financial reporting, it is essential that boards are tasked with ensuring the continuous monitoring of the organisation’s governance framework, and that the process for doing so is clearly defined and communicated.”
