Read the Financial Reporting Council proposed revisions to the UK Corporate Governance Code consultation document
The FRC is proposing to amend the Code to provide for (a) above. There was no support for the recommendation against executive directors serving as non-executive members of a remuneration committee of another listed company. Therefore, the FRC is not proceeding with this proposal.
On the votes on remuneration resolutions, the FRC is proposing that companies explain, when announcing their AGM results, how they intend to engage with shareholders when a significant proportion of shareholders have voted against any resolution at the AGM. This is considered preferable to focussing solely on the remuneration resolutions.
In November 2013, the FRC consulted on draft guidance on risk management and going concern together with corresponding changes to the Code. In response to feedback, the FRC is proposing to amend the Code as follows:
- To provide that companies must robustly assess their principal risks and report on how those risks are managed or mitigated (new Code Provision C.2.1); and
- To clarify that boards have a responsibility to monitor the risk management and internal control systems on an on-going basis, rather than annually (revised Code Provision C.2.3).
The FRC is also proposing that companies state, in their financial statements, whether they consider it appropriate to adopt the going concern basis of accounting and to identify any material uncertainties in their ability to continue to do so. Companies will also be required to make an explicit statement on the board’s broader assessment of the company’s on-going viability.