On 16 July 2018, the Financial Reporting Council (“FRC”) published a revised UK Corporate Governance Code (the “Code”). The Code is aimed at promoting successful and sustainable businesses and encouraging long-term investment. However, the Code is not rigid in its application and does not provide set rules, but allows companies to adopt a flexible approach through the use of principles set out in the Code and the “comply and explain” method of reporting. Accordingly, Companies are encouraged to promote integrity and openness, value diversity and to be responsive to the views of shareholders and wider stakeholders.
The Code is supported by the simultaneous publication of the FRC’s Guidance on Board Effectiveness (the “Guide”). The Guide has been published in order to assist company boards with self-reflection on the role of the board and its effectiveness. The Guide also sets out suggested good practice in relation to how a board operates. This suggested good practice assists boards in developing their own good practice and provides stakeholders with a reference point against which actions taken by a board can be assessed
