Changes to the UK Corporate Governance Code

Posted: 2nd August 2012

Changes to the UK Corporate Governance Code
The UK Corporate Code of Governance is explicit that diversity, including gender, is to be taken into account when assessing board effectiveness.

Our readers may be interested in the following as they consider best practice guidance on governance:

FTSE 350 companies are to put the external audit contract out to tender at least every ten years with the aim of ensuring a high quality and effective audit, whether from the incumbent auditor or from a different firm. The Financial Reporting Council will be holding discussions with companies, auditors and investors to consider whether guidance on tendering would be useful
Audit Committees are to provide to shareholders information on how they have carried out their responsibilities, including how they have assessed the effectiveness of the external audit process
Boards are to confirm that the annual report and accounts taken as a whole are fair, balanced and understandable, to ensure that the narrative sections of the report are consistent with the financial statements and accurately reflect the company’s performance

Companies are to explain, and report on progress with, their policies on boardroom diversity. This change was first announced in October 2011, but its implementation was deferred to avoid piecemeal changes to the Code
Companies are to provide fuller explanations to shareholders as to why they choose not to follow a provision of the Code.

The UK Corporate Governance Code also notes that diversity (including gender) is one of the factors to be taken into account when assessing a board’s effectiveness.

For further information about our governance services please contact Mark Sweeny on 07887 512165, email or Dr Fiona Underwood on 07788 643092, email:

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