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UK Corporate Governance Code

The UK Corporate Governance Code (formerly known as the Combined Code) sets out standards of good practice for listed companies on board composition and development, remuneration, shareholder relations, accountability and audit. The code is published by the Financial Reporting Council (FRC).

What's on this page?

  • The code
  • Online articles
  • Useful links
  • Archive
  • Online books, guides and publications
  • Books and articles from the Library

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Featured book

A practitioner's guide to directors' duties and responsibilities
Boxell, T., ed. (Sweet and Maxwell, 2013, 522p) 
Updated to take into account recent developments, including the Enterprise and Regulatory Reform Act, the Market Abuse Directive (MAD II) and changes to the UK Corporate Governance Code.

To borrow this book please contact the Library.

Featured link

Corporate Governance Review 2013: Governance steps up a gear 
Annual survey and report conducted by Grant Thornton of FTSE 350 companies, assessing compliance with disclosure requirements of the UK Corporate Governance Code.

The code

On 17 September 2014 the FRC published an updated version of the UK Corporate Governance Code, as announced in the press release FRC updates UK Corporate Governance Code. The revised Code will apply to accounting periods beginning on or after 1 October 2014.

The FRC has also published a Feedback statement: Revisions to the UK Corporate Governance Code which summarises the main points from the April-June 2014 consultation responses, the decisions taken by the FRC and the reasons for those decisions. The statement notes that further changes to the Code are likely in 2016, as a result of the Government’s implementation of the EU Audit Directive and as follow up to the report by the Competition Commission (now the Competition and Markets Authority) on the market for audit services in FTSE 350 companies.

Online articles

The ICAEW Library & Information Service provides access to a range of articles in full text from leading business, finance and management journals. This resource is available to ICAEW members, ACA students and other entitled users.

You will need to be logged-in to the website to access the full range of articles available online.

Useful links

Briefings and summaries

UK Corporate Reporting changes: how will companies forecast for the long term?
ICAEW Chief Executive Michael Izza discusses the September 2014 revised UK Corporate Governance Code on his blog.

Audit Committee Institute (KMPG)
The Audit Committee Institute (KPMG) has published a number of briefings on the UK Corporate Governance Code which are available to download from the ACI website.

Revisions to the UK Corporate Governance Code and the Guidance on Audit Committees
Corporate briefing from law firm Ashurst published in October 2012 covering changes to the UK Corporate Governance Code and related guidance.

FRC expands role of audit committees and requires additional disclosures
A summary from international law firm Linklaters on the changes to the UK Corporate Governance Code in 2012. Published on 4 October 2012.

UK Corporate Governance Code: changes to audit committee, diversity and comply or explain rules
Summary of recent changes to the UK Corporate Governance Code from international law firm Olswang. Published on 22 October 2012.

Related guidance

FRC Guidance on Risk Management and Internal Control and Related Financial and Business Reporting (the Risk Guidance)
Updated in September 2014, the guidance is an amalgamation of the 2005 Turnbull and 2009 Going Concern guidance notes, revised to reflect the finalised requirements of the Code and in the light of comments from consultation in November 2013 and April 2014.

FRC Guidance for Directors of Banks on Solvency and Liquidity Risk Management and the Going Concern Basis of Accounting
This September 2014 guidance provides supplementary considerations for the banking sector, and should be read in conjunction with the Risk Guidance.

FRC Extracts from International Standards on Auditing (UK and Ireland) 260, 570 and 700
Revised in September 2014, the extracts draw attention to related changes to the standards that were made following consultation in 2012. The revisions are effective for audits of financial statements for periods commencing on or after 1 October 2014.

FRC Guidance on Audit Committees
The guidance, updated in September 2012, is 'intended to assist company boards when implementing the sections of the UK Corporate Governance Code dealing with audit committees and to assist directors serving on audit committees in carrying out their role.' Formerly known as the Smith Guidance.

FRC Guidance on Board Effectiveness
Guidance published by the FRC in March 2011 'to assist companies in applying the principles of the UK Corporate Governance Code. The guidance relates to the sections of the Code that deal with leadership and the effectiveness of the board.'

ICSA Guidance notes
The Institute of Chartered Secretaries and Administrators (ICSA) has published a number of guidance notes which aim to provide practical guidance on the requirements of the 2012 code, including 'Roles of the Chairman, Chief Executive and Senior Independent Director under the Combined Code' and 'Matters Reserved for the Board'. The guidance notes can be downloaded from the resource centre section of the ICSA website (available to ICSA members only).

Reports

Corporate Governance Review 2013: Governance steps up a gear
Annual survey and report conducted by Grant Thornton of FTSE 350 companies, assessing compliance with disclosure requirements of the UK Corporate Governance Code.

Developments in Corporate Governance 2013: The impact and implementation of the UK Corporate Governance and Stewardship Codes
This annual report by the Financial Reporting Council, published in December 2013, focuses on developments in corporate governance and stewardship over the last twelve months. It concludes that there are now high levels of compliance with the FRC's 2010 recommendations, but companies who choose not to follow the Code are often failing to explain clearly why in their reports.

When is comply or explain the right approach?
An ICAEW New Challenges Initiative 2013 paper about promoting good corporate governance and the role of comply or explain as a means to that end. Corporate governance codes in the EU are applied on a comply-or-explain basis. However, in other areas of business regulation, we rarely observe this approach in practice. So, under what conditions is comply or explain appropriate? And, what do these conditions mean for its application in different countries?

Archive

2014

In April 2014 the FRC opened a consultation on its two-yearly review of changes to the UK Corporate Governance Code following earlier consultations on directors’ remuneration (October 2013) and risk management, internal control and the going concern basis of accounting (November 2013). The consultation closed on 27 June 2014.

2012

Comply or explain: 20th anniversary of the UK Corporate Governance Code
On 6 November 2012 the FRC published a collection of essays to mark the 20th anniversary of the Cadbury Code which introduced the UK's 'comply or explain' approach to best practice in the organisation of corporate boardrooms and their relations with shareholders. The publication was announced in the press release FRC celebrates 20 years of the UK Corporate Governance Code.

A revised version of the UK Corporate Governance Code was published by the FRC on 28 September 2012, as announced in the press release FRC publishes updates to UK Corporate Governance Code and Stewardship Code. The updated code applied for financial years commencing on or after 1 October 2012.

The FRC also published an accompanying Feedback statement: Revisions to the UK Corporate Governance Code and Guidance on Audit Committees which summarised the main points from the responses to the consultation review, the decisions taken by the FRC and the reasons for those decisions.

The FRC's review of the UK Corporate Governance Code was launched in April 2012. The full text of the consultation paper, revisions to the UK Corporate Governance Code and Guidance on Audit Committees, and the draft revised UK Corporate Governance Code are available to download from the FRC website. The consultation period closed on 13 July 2012.

2011

Developments in corporate governance 2011: The impact and implementation of the UK Corporate Governance and Stewardship Codes
Report published in December 2011 from the FRC analysing implementation of the codes.

In October 2011 the FRC announced its decision to amend the UK Corporate Governance Code to strengthen the principle on boardroom diversity which was first introduced into the Code in June 2010. The Feedback statement: Gender diversity on boards summarises the main points from the responses, the decisions taken by the FRC and the reasons for those decisions. The changes 'will be incorporated in an updated version of the Code to be published in 2012, following consultation on proposed changes to other parts of the Code, which will apply to financial years beginning on or after 1 October 2012', although the FRC strongly encourages early adoption of its recommendations.

2010

A revised version of the UK Corporate Governance Code was published by the FRC on 28 May 2010, as announced in the press release The Financial Reporting Council issues new Governance standards for listed companies. The new code applied to financial years beginning on or after 29 June 2010.

The changes from the previous version of the Combined Code are listed in the FRC publication Revisions to the UK Corporate Governance Code (formerly the Combined Code) published in May 2010.

2009

The FRC published their final report on the review on 1 December 2009 as announced in a press release issued the same day. A consultation on the revised UK Corporate Governance Code closed on 5 March 2010.

On 28 July 2009 the FRC issued a Progress report: Review of the effectiveness of the Combined Code which summarised the results of the consultations and research carried out. The publication of the report was announced in the press release FRC issues update on the review of The Combined Code.

Response to the FRC's Review of the effectiveness of the Combined Code: Call for evidence
The London Stock Exchange published a response to the FRC review in May 2009 in which they 'note that the current economic conditions have tested the effectiveness of the Code, and propose suggestions for improving the operation of the Code'. The LSE wish to 'reinforce the success of the principles-based, 'comply or explain' approach' and encouraged the FRC to 'consider this review within the broader market context'.

In March 2009 the FRC launched a review of the Combined Code and published the full text of the consultation paper, Review of the effectiveness of the Combined Code: Call for evidence. The consultation period closed on 29 May 2009.

2008

A revised version of the Combined Code (June 2008) was published on the FRC website on 27th June 2008 which applied to accounting periods beginning on or after 29 June 2008.

The changes from the previous version of the Combined Code are listed in the FRC publication June 2008 changes to the Combined Code.

eBooks

The Library provides full text access to a selection of key business and reference eBooks from leading publishers.

You will need to be logged-in to the website to read these eBooks.

Corporate Governance: A Practical Guide to the Legal Frameworks and International Codes of Practice
Calder, Alan (Kogan Page, 2008)
'In the 21st century, corporate governance has become critical for all medium and large organizations. Those without a governance strategy face significant risks; those with one perform measurably better. But what is corporate governance, and what do directors of companies – both quoted and unquoted – need to know? This book aims to provide a clear description for managers and executives that will enable them to identify the practical steps necessary to meet today's corporate governance requirements.'

Finance Director's Handbook
Glynis Morris, Sonia McKay, Andrea Oates (Elsevier Science & Technology, 2007)
This book 'is a comprehensive guide to the wide range of duties that many modern finance directors undertake, providing updated coverage of the varied aspects of the finance director's role. The fifth edition has been completely updated to reflect the recent implementation of the Companies Act 2006 (CA 2006) and related guidance.'


Articles and books in the Library collection

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