The Financial Reporting Council has published a revised version of the UK Corporate Governance Code following the consultation that it launched in May 2023 (for more details, see our blog post here). As trailed by the FRC in an announcement in November last year, the scope of the changes being introduced by the revised Governance Code has been significantly scaled back from the proposals the FRC consulted on (see our blog post on the FRC's November 2023 announcement).
The most significant changes are to the reporting requirements in relation to internal controls in Section 4 of the Governance Code, though changes are being made throughout the Governance Code, including in section 1 on outcomes-based reporting; section 3 on diversity, inclusion and equality of opportunity; and to the provisions on remuneration in section 5. Proposals which the FRC has not taken forward include those relating to director over-boarding and the remit of the audit committee on sustainability matters, and those derived from the audit and governance reporting regulations which were withdrawn by the government in October last year.
The revised Governance Code will apply to financial years beginning on or after 1 January 2025. However, companies are being given an extra year to comply with the new disclosure requirements in relation to internal controls, with the revised Provision 29 applying to financial years beginning on or after 1 January 2026.
The FRC is updating the guidance which accompanies the Governance Code. The revised guidance will be published on 29 January 2024.
We have prepared a short overview of the changes being introduced, which is available here.
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