Outcomes based reporting and Provision 29 were all highlighted in the review, but the greatest focus was on the flexibility and proportionality of the Code. The FRC has seen increasing numbers of companies departing from at least one Code provision, with the most common departures being chair independence, chair tenure and annual board performance reviews.
The FRC has consistently supported companies providing an explanation where compliance has not been possible or appropriate, reiterated in the Review: ‘We support departures from provisions of the Code where companies provide clear, meaningful and context-specific explanations for their approach.’
When departing from Code provisions, the FRC emphasises its guidance for:
Mark Babington, Executive Director of Regulatory Standards, emphasised that ‘Flexibility is a core strength of the UK Corporate Governance Code. It allows companies to adopt governance arrangements that reflect their individual circumstances while remaining transparent with investors about the choices they have made’.
With an increasing focus on simplification and streamlining in corporate reporting, mindful of the Government’s ongoing Modernising Corporate Reporting consultation, the FRC also emphasised that the most effective reports were not necessarily the longest. Clear structure, concise explanations and company-specific insight were considered more important than volume – something we have seen reflected in our own experience this year.
At Black Sun, we’re strongly placed to help guide companies in crafting their reporting across the corporate reporting suite - including streamlining and best practice. If you’d like to explore how we can help you with your reporting, please get in touch.
About Black Sun
Black Sun Global is a stakeholder advisory and engagement agency that's been driving transformation and positive change for ambitious brands for more than 20 years. With deep expertise in disclosure and reporting, ESG, sustainability, and digital engagement, we reshape how organisations connect with customers, investors, employees, and the wider world.
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