Board focus will be forced to change and, at last, boards will be unable to escape responsibility for internal control, assurance and resilience.
But surely directors should be taking responsibility for these already. If not, why not?
Small but significant adjustments to the UK’s Code of Corporate Governance it will mean a big win for shareholders.
Between May and mid-September 2023, the Financial Reporting Council (FRC) has been consulting on its proposed Code changes which focus on internal control, assurance, and resilience. This is in response to decisions by the Government to the consultation “Restoring Trust in Audit and Corporate Governance”.
UKSA has been involved from the start in 2018 and, most recently, in 2021 UKSA & ShareSoc have responded jointly to the most important review of auditing and corporate governance for a generation | UKSA.
At that time we thought Government was not being strong enough, and that remains true. There is consensus that the current proposals are better than nothing and the FRC has included many good ones.
We have emphasised that we:
- Expect better information about risk, control and resilience that demonstrates their contribution, whether successful or unsuccessful, to company outcomes.
- Need a consistent definition and application of materiality across corporate reporting against which to assess the quality of risk, control and resilience.
- Require the inclusion of a principle and/or provision for IT governance as, without it, companies will be unable to address the many concerns related to data theft, data loss, cybersecurity and AI.
Click here for the consultation and our response.
