For the first time in 4 years, the Code is to be reviewed, with new rules to make boards more responsible for fraud and their company’s finances, and strengthen accountability for bad behaviour.
The strengthened Code is designed to provide a stronger framework for reporting on the effectiveness of internal controls and board responsibilities for expanded sustainability and reporting of environmental, social, and governance principles.
Some changes will require primary legislation and the government has indicated that work will begin on a draft for a bill for publication in the next session of parliament. Other measures will be addressed through secondary legislation and changes to existing regulatory measures by the FRC. This is part of a wider piece of work by the FRC on restoring trust in audit and corporate governance. The FRC’s position paper can be found here.