UK Corporate Governance Code (UKCG Code) meaning

ARCHIVED: This archived checklist summarises how the 2012 edition of the UK Corporate Governance Code differed from the 2010 UK Corporate Governance Code. It is not maintained and is supplied for background information only. Checklist—2010 UKCG Code and 2012 UKCG Code compared In September 2012, the Financial Reporting Council issued a new edition of the UK Corporate Governance Code (the 2012 UKCG Code) following its two-yearly consultation on potential amendments to the UK Corporate Governance Code (UKCG Code), which began in April 2012. The 2012 UKCG Code applies to companies with accounting periods commencing on or after 1 October 2012. The points below indicate how the 2012 UKCG Code varied from the version released in 2010 (the 2010 UKCG Code): Governance and the Code: Wording unique to the 2010 edition and the preceding review of the UKCG Code has been removed. Preface: Wording unique to the 2010 edition and the preceding review of the UKCG Code has been removed...

This Checklist outlines the requirements of the UK Corporate Governance Code and the Disclosure Guidance and Transparency Rules concerning the composition of audit committees in quoted companies, alongside best practice set out by leading representative bodies for institutional investors. It further reflects guidance issued by the Quoted Companies Alliance for small and mid-size quoted entities, and by the Association of Investment Companies for investment companies. The summary draws on the UK Corporate Governance Code (UKCG Code) to set expectations for committee make-up and expertise. Quoted companies (other than investment companies) The audit committee must consist of at least three independent non-executive directors, or two for smaller companies (ie those outside the FTSE 350). The chair of the board should not sit on the committee. The board should assure itself that at least one committee member has recent and relevant financial experience. As a whole, the audit committee should possess competence relevant to the sector in which the company operates... ...

ARCHIVED: This archived checklist outlines the ways in which the 2016 iteration of the UK Corporate Governance Code varied from the 2014 UK Corporate Governance Code. It is not updated and is supplied for background purposes only. Checklist—2014 UKCG Code and 2016 UKCG Code compared In April 2016, the Financial Reporting Council issued a fresh edition of the UK Corporate Governance Code (the 2016 UKCG Code) to incorporate changes arising from Regulation (EU) 537/2014 (EU Audit Regulation), Directive 2014/56/EU (Statutory Audit Amending Directive) and the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 (Statutory Audit Services Order). The 2016 UKCG Code applied to companies with accounting periods starting on or after 17 June 2016. This table sets out how the 2016 UKCG Code diverged from the text issued in 2014 (the 2014 UKCG Code); differences are shown using italics (inserted wording) and square brackets (removals): Provision 2014 UKCG Code 2016 UKCG Code Preface Language specific to...

With what it considers measured, targeted updates to the 2018 UKCG Code, the FRC aims to strike a balance: sustaining investor and stakeholder confidence in premium listed companies while keeping administrative and regulatory demands on businesses to the minimum required. Digital guidance linked to the 2024 UKCG Code is due for publication on 29 January 2024. Original news: FRC publishes revised UK Corporate Governance Code, LNB News 22/01/2024 18. The Financial Reporting Council has now issued its revisions to the UK Corporate Governance Code (the Code), intended to bolster transparency and accountability across UK companies and to underpin the UK’s growth and competitiveness... Why is the UKCG Code changing? On 24 May 2023, the FRC opened a consultation setting out 18 proposals to amend the 2018 Code, centred chiefly on building a stronger framework for prudent, effective risk management and internal controls. They also acknowledged the broader duties of boards and audit committees regarding expanded environmental, social and governance reporting, audit and assurance requirements, and identified opportunities to...

In this issue: Corporate governance Retained EU law Q&As Useful Information Weekly highlights from other practice areas Corporate governance FRC revises UK Corporate Governance Code The Financial Reporting Council (FRC) has published an updated UK Corporate Governance Code (UKCG Code) (the 2024 UKCG Code), introducing only modest amendments to the 2018 iteration (the 2018 UKCG Code). This update follows the FRC’s consultation issued on 24 May 2023, which backed the legislative changes set out in the government’s response to its May 2022 White Paper, Restoring Trust in Audit and Corporate Governance (for further details, see: Share Incentives weekly highlights—25 May 2023—Corporate governance). The consultation presented 18 proposals to revise the 2018 UKCG Code, with an emphasis on establishing a stronger framework for prudent, effective risk management and internal controls. However, on 7 November 2023 the FRC stated that it would not proceed with most of its suggested revisions to the 2018 UKCG Code, so as to lessen the...

Rules and guidance The principal rules on publishing and laying a company’s annual accounts and reports appear in Part 15 of the Companies Act 2006 (CA 2006). For these purposes, a company’s annual accounts and reports comprise: the annual accounts the directors' report the strategic report (unless the company is not obliged to prepare one) the directors' remuneration report, which may include a directors’ remuneration policy, and any separate corporate governance statement not included in the directors' report (for a quoted company) the auditor’s report on the accounts, the directors’ report, the strategic report, the auditable part of any directors’ remuneration report and any separate corporate governance statement (unless the company qualifies for audit exemption) Certain statutory requirements governing publication and laying differ according to whether the company is public or private, and whether it is quoted or unquoted. Quoted companies cover UK companies with shares listed in the UK or in another EEA state; AIM companies do...

UKCG Code, UK Listing Rules and DTRs The UKCG Code applies to companies that hold a listing of equity shares in the equity shares (commercial companies) category, whether incorporated in the UK or elsewhere, and it sets out provisions on the establishment of committees of the board. It requires the creation of an audit committee, and it also envisages that, in particular circumstances, companies with a listing of equity shares in the equity shares (commercial companies) category may wish to establish a separate risk committee. For further guidance on audit committees, see Practice Note: The audit committee. Under the Financial Conduct Authority (FCA) UK Listing Rules (UKLR), all companies with a listing of equity shares in the equity shares (commercial companies) category are required either to comply with the provisions of the UKCG Code or to explain to shareholders in their next annual report why they have not done so, reflecting the 'comply or explain' principle...

The purpose of internal control Internal control exists to support the identification, handling and mitigation of risk in settings where a company’s aims, internal organisation and the broader markets in which it operates are constantly shifting, adapting to changing conditions, and the risks it encounters will evolve over time and across cycles. Although a company cannot abolish these risks, a robust internal control system is central and fundamental to managing risks that are material to achieving its business objectives and to helping safeguard shareholders’ investment interests and the company’s assets and resources. Under the Financial Reporting Council’s UK Corporate Governance Code (UKCG Code), the board of a premium listed company must establish processes to manage risk effectively, oversee the internal control framework, and define the nature and scale of the principal risks it is prepared to assume in pursuing its strategic objectives. In addition, the Disclosure Guidance and Transparency Rules (DTRs) require an issuer to make a range of disclosures about internal control and risk management systems within its...

Memorandum prepared by [ Name of Firm ] For the directors of [ insert company name ] (the Company) advising on annual environmental reporting 1 Scope This memorandum outlines the principal environmental disclosures the Company must include within its annual report and accounts. It addresses the UK Listing Rule and Companies Act 2006 ( CA 2006 ) obligations to present climate-related information consistent with the recommendations of the Task Force on Climate-related Financial Disclosures ( TCFD ). It also covers the duty to disclose greenhouse gas ( GHG ) emissions, energy consumption and measures to improve energy efficiency under the Streamlined Energy and Carbon Reporting ( SECR ) framework, together with other environmental legislation [ , and relevant principles and provisions from the UK Corporate Governance Code ( UKCG Code ) ] . In addition, it provides practical guidance to assist companies in compiling robust environmental disclosures. As a listed entity, the Company is further subject to continuing disclosure duties under the UK Listing Rules, the Disclosure Guidance...