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The UK corporate governance code 2024: "small, but important" revisions

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By illuminem briefings 🌎

· 2 min read


illuminem summarizes for you the essential news of the day. Read the full piece on Dentons or enjoy below:

🗞️ Driving the news: On 22 January 2024, the Financial Reporting Council (FRC) announced a revision to the UK Corporate Governance Code, introducing the 2024 Code, which emphasizes enhanced audit, risk, and internal control standards
Accompanying updated guidance supports the implementation of these changes, which aim for application in financial periods starting in 2025

🔭 The context: This update responds to a broader consultation initiated in May 2023 and refines the focus primarily on internal controls, risk management, and governance clarity
The changes reflect a strategic pivot to address stakeholder feedback and adapt to halted legislative modernizations, aiming to balance rigorous governance with reduced reporting burdens

🌍 Why it matters for the planet: The revised Code strengthens corporate responsibility towards effective risk management and internal control, indirectly supporting sustainability and ethical governance
Enhanced focus on these areas can drive companies towards more environmentally and socially responsible business practices, aligning with global ESG (Environmental, Social, and Governance) criteria

⏭️ What's next: The 2024 Code, which further details obligations for annual reporting on internal controls effectiveness, will be mandatory for financial years commencing after 1 January 2025
This evolution signifies a step towards more accountable and transparent corporate governance in the UK, potentially setting a benchmark for global practices

💬 One quote: "The well-established principle of boards having the flexibility to 'comply or explain' remains the foundation of the 2024 Code." - FRC Statement

Click for more news covering the latest on corporate governance

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