The Financial Reporting Council has announced plans for a "fundamental review" of the UK Corporate Governance Code. This will take into account the work done by the FRC on corporate culture and succession planning, as well as the issues raised in the Government's Green Paper on Corporate Governance and the BEIS select committee inquiry. It will also consider the balance between the Code's principles and provisions. However, there is no intention to amend what the FRC refers to as the strengths of the UK corporate governance framework such as the unitary board or the comply or explain approach.
To guide the review, the FRC will seek input from a wide range of stakeholders, including its recently established Stakeholder Advisory Panel. The Panel is drawn from a wide range of sectors including the Chartered Institute of Internal Auditors, Share Action, CIMA, Barclays, Co-operative UK, TUC, RPMI Railpen, Institute of Customer Services, Centre for Corporate Governance, London Business School, CIPD, IBE, ACAS, High Pay Centre, Resolution Foundation, City Values Forum, CBI, Joseph Rowntree Foundation, GHO Capital Partners.
In its response to the Government's Green Paper on Corporate Governance, the FRC will highlight the importance of helping boards take better account of stakeholder views, linking executive pay 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.
The FRC will commence a consultation later in 2017 based on the outcome of the review and the Government's response to its Green Paper.
Further details can be found in the FRC's press release, here.
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