FRC Revises UK Corporate Governance Code

The Financial Reporting Council (FRC) has made revisions to the UK Corporate Governance Code, with goals to enhance the transparency and accountability of UK companies and support the country’s growth, competitiveness, and attractiveness. The changes also deliver on intentions shared by the FRC in a policy statement late last year, which included setting out a future direction for revisions to the code. In the spirit of promoting “smarter” regulation, the FRC said it had kept changes to the minimum necessary. Effective governance, it added, should be targeted and proportionate. This approach also reflects the FRC’s willingness to foster trust and confidence in UK corporations, while limiting burdens. The revisions have been welcomed by stakeholders, including the Association of Investment Companies (AIC), which noted a “more balanced approach” than originally proposed by the FRC. “A flexible, pragmatic approach to achieving proper governance standards is essential if UK markets are to maintain their attraction in an increasingly competitive global market for listings,” said Richard Stone, Chief Executive of the AIC. “The FRC has taken on board concerns from the AIC and others that the original proposals were poorly targeted and disproportionate.” The FRC will publish digital guidance on the code later this month. Richard Moriarty, CEO of the FRC, said: “The small, but important change to the expectations on internal controls will better support boards asking the right questions at the right time to help them gain the level of assurance they require, and…demonstrate good governance to investors and other stakeholders”.

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