UK CORPORATE GOVERNANCE CODE: BUSINESS AS USUAL OR A NEW ERA?
The journey of corporate governance legislation in the UK evolved once more in January 2024, following the announcement of the new version of the UK Corporate Governance Code (Code), which comes into effect from 1 January 2025. The principles of the new Code remain largely the same as previous versions, with the changes to be implemented rather limited in scope. As such, the key question is whether the updated Code ushers in a new regime or is a step down an existing, well-trodden path.
The Financial Reporting Council (FRC) states that businesses with “good corporate governance policies see stronger growth, and help contribute to more inclusive societies by ensuring the interests of all stakeholders are balanced”. The Organisation for Economic Co-operation and Development (OECD) notes that “the corporate governance framework should be developed with a view to its impact on corporate access to finance, overall economic performance and financial stability, the sustainability and resilience of corporations, market integrity, and the incentives it creates for market participants and the promotion of transparent and well-functioning markets”. Ultimately, the accountability and transparency achieved by a good corporate governance framework produces trust and confidence for stakeholders and potential investors. Therefore, a jurisdiction with good corporate governance disclosures is arguably an attractive investment market.
Apr-Jun 2024 Issue
Catherine Odigie