FRC Review of Corporate Governance Reporting

This is the second year that the Financial Reporting Council (FRC) has reviewed how UK premium listed companies have reported on their application of the 2018 UK Corporate Governance Code.

The report has found that similar to last year, there is too great a use of boilerplate or declaratory statements. These statements are seldom substantiated by actions or example, and therefore do not offer insight into company governance. Most companies state their remuneration arrangements support company strategy, yet only some explain how. Very few companies explained how remuneration aligns with company purpose and values.  Concerns also remain with diversity and inclusion and succession planning at board-level. On a more positive note, there has been improvement in reporting of ESG issues.

The review sets out the FRC’s expectations across the five areas of the Code: Code Compliance; Leadership; Division of responsibilities and board composition; Audit, risk and internal controls; and Remuneration The report may be found at : FRC Review of Corporate Governance Reporting_November 2021