UK: FRC consults on revisions to the UK Corporate Governance Code and UK Stewardship Code

The Financial Reporting Council has published for consultation proposed changes to the UK's Corporate Governance Code: see here (pdf). The consultation paper also included proposed changes to the FRC's guidance for audit committees. A draft copy of the amended Code, highlighting the revisions, is available here (pdf). A draft copy of the revised audit committee guidance is available here (pdf). Amongst the amendments made to the Code is the inclusion of a new provision, subject to the comply or explain principle, that FTSE350 companies should put the external audit out for tender at least every ten years (recommendations are made for when this should first take place, taking into account the date when the audit engagement partner is due to rotate and when the audit was last put out to tender). Some further detail is also provided concerning the explanations explanations provided by companies where they choose not to comply with a provision in the Code.

The FRC is also consulting on proposed changes to the UK's Stewardship Code: see here (pdf). A draft copy of the revised Stewardship Code, highlighting the proposed changes, is available here (pdf). The changes are intended, amongst other things, to provide greater clarity with regard to the meaning of stewardship and to explain how comply or explain operates should operate.