Corporate governance:
encouraging dialogue and participation

Learn more

  • Share

How we govern our corporations plays a central role in the strength and health of our global economy.

Corporate Governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders' role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company's strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board's actions are subject to laws, regulations and the shareholders in general meeting.

Today, there is a growing dialogue among the different stakeholders about corporate governance and how it should evolve to cope with the increasingly dynamic and global nature of our capital markets. This dialogue is taking place against a background of legislative and regulatory change; the implementation of International Financial Reporting Standards around much of the world; an increase in the scope of audit and other internal control and risk management activities; and increased public scrutiny.

It is only with dialogue and the active participation of all stakeholders that the appropriate balance can be reached between:

  • strengthened central controls and fast local responsiveness;
  • effective risk management and the enduring need for innovation; and
  • the additional costs of new corporate governance and the value it seeks to protect and enhance.

The aim of this section is to help inform and stimulate that dialogue.

Changes to communication and reporting for companies and auditors - what do companies and auditors need to start thinking about?

(May 2013)

This publication provides some practical guidance and considerations to help companies consider the requirements of the revised UK Corporate Governance Code for:

  • boards to confirm that the annual report and accounts is "fair, balanced and understandable
  • audit committees to provide information to shareholders (within a separate section of the annual report and accounts) on the significant matters considered in relation to the financial statements and how they were addressed.

Read our publication by clicking on the link above.

Executive Remuneration

On the 25 April 2013, the Enterprise and Regulatory Reform Bill containing the Large and Medium-sized Company and Groups (Accounts and Reports) (Amendment) Regulations received Royal Assent. This includes the requirement for a binding vote on remuneration policy. However, details on policy implementation and reporting will be covered in secondary legislation, which is not expected to be finalised until June 201

Read our publication by clicking on the link above.

Audit Committee reporting: enhancing trust and confidence in corporate governance

The Financial Reporting Lab (Lab) is an initiative launched just over a year ago by the Financial Reporting Council (FRC). Its aim is to help improve the effectiveness of financial reporting in the UK by facilitating a dialogue between companies and the investment community, and providing practical observations on reporting approaches that are considered to be helpful. It recently initiated a project to identify and help develop best practice audit committee reporting, in light of both new and existing provisions in the 2012 versions of the UK Corporate Governance Code (Code) and Guidance on Audit Committees (Guidance).

Read our publication by clicking on the link above.

Briefing paper: Implementing the Sharman Panel recommendations

The Financial Reporting Council has published proposals for implementing the Sharman Panel's recommendations, including draft guidance on going concern 2013 (‘the Guidance’). The Guidance covers: Going Concern Assessment Process, Going Concern Assurance and Reporting on Going Concern.

Read our publication by clicking on the link above.

Audit exemptions

A new UK statutory instrument exempts qualifying subsidiaries from a statutory audit if their parent companies meet certain legal requirements. Find out about the implications for your business.

Read our publication by clicking on the link above.