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Developments in Corporate Governance 2011

The Financial Reporting Council's summary of developments and research projects to date and those anticipated in 2012.

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Developments in corporate governance 2011

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The FRC published the first in an annual series of progress reports on the operation of the UK Corporate Governance Code and Stewardship Code.  See the press release for more information. 

Key points of the report

  • Limited revisions of both Codes will be subject to consultation in 2012 and changes are anticipated to take effect from 1 October 2012. These changes will focus on strengthening the Codes without fundamental change.
  • Consultation will cover changes to extend the remit of, and reporting by, the audit committee.
  • It is possible that further changes will be proposed as a consequence of the Sharman Panel of Inquiry into going concern and the BIS consultation on narrative reporting.
  • The FRC will also consult on updates to its guidance notes on audit committees and on risk management and internal control.
  • As for Stewardship it is not envisaged that new principles will be introduced but the language may be clarified in certain places for example on the different role of asset managers and owners; conflicts of interest, collective engagement and the use of proxy voting agencies and possibly a recommendation that investors disclose their policy on stock lending.