The UK Financial Reporting Council (FRC) has announced important revisions to the UK Corporate Governance Code which will apply to companies with a premium listing on the London Stock Exchange, regardless of where they are incorporated.
Among a number of updates, the 2024 Corporate Governance Code makes new requirements for company board involvement in risk management.
Key changes in this area include:
‘Principle O’ of the Corporate Governance Code has been amended to make the board responsible not only for establishing, but also for maintaining the effectiveness of, the risk management and internal control framework. This change needs to be implemented by 1 January 2025.
A new element introduced in the 2024 Corporate Governance Code is contained in ‘Provision 29’. This states that ‘the board should monitor the company’s risk management and internal control framework and, at least annually, carry out a review of its effectiveness. The monitoring and review should cover all material controls, including financial, operational, reporting and compliance controls’. Provision 29 will apply to financial years beginning on or after 1 January 2026.