The Financial Reporting Council (FRC) has announced plans for a fundamental review of the UK Corporate Governance Code.
This will take account of work done by the FRC on corporate culture and succession planning, and the issues raised in the Government’s Green Paper and the BEIS Select Committee inquiry.
The review will build on the Codes globally recognised strengths developed over the past 25 years while considering the appropriate balance between its principles and provisions and the growing demands on the corporate governance framework
To guide this review, the FRC will seek input from a wide range of stakeholders including its recently established Stakeholder Advisory Panel of high profile representatives from a wide variety of sectors.
In its response to the Government’s Green Paper on Corporate Governance Reform the FRC will highlight the importance of helping boards take better account of stakeholder views, linking executive remuneration with performance, and extending the FRC’s enforcement powers to ensure that disciplinary action can be taken against all directors where there have been financial reporting breaches.
Any changes to the regulatory frameworks and to the Code will be done carefully and through full consultation with a wide range of stakeholders.
The FRC will start a consultation on its proposals later in 2017, based on the outcome of the review and the Government’s response to its Green Paper.