The Financial Reporting Council (FRC) published its Annual Review of Corporate Governance Reporting in November, analysing reporting trends and practices among 100 UK-listed companies against the 2018 UK Corporate Governance Code for the last time. Going forward Annual reports will be reviewed against the updated 2024 Code which came into effect in January.
A key finding shows that companies reporting departures from Code provisions are increasingly providing clear, meaningful and context-specific explanations for their approach. The review highlights that this flexibility is a core strength of the Code, enabling companies to tailor their governance arrangements to their individual circumstances whilst maintaining transparency and confidence.
The analysis found 25 companies disclosed a departure from at least one Code provision, with the most common relating to audit committee composition, chair independence and tenure. Many organisations demonstrated good practice by providing comprehensive explanations that outlined their rationale and described alternative governance arrangements in place.
The review also highlights examples of good practice, with companies continuing to provide high-level commentary supported by clear signposting to relevant sections of their annual reports. This approach enables companies to communicate their governance practices effectively without adding unnecessary length to their disclosures.
