UK regulator ditches ESG proposals for company boards in updated governance code
Corporate governance expectations for internal controls are set to remain unchanged | Credit: iStock
Britain's financial auditing regulator has dropped plans to add ESG requirements in the UK Corporate Governance Code in a bid to limit administrative burdens on businesses «to the minimum necessary», it announced today (22 January).
The Financial Reporting Council (FRC) — the independent government agency which regulates auditors, accountants, and actuaries — this morning published several revisions to the UK Corporate Governance Code which company boards are expected to adhere to.
The changes, which follow the FRC's «largest ever» stakeholder consultation last year — have been limited to «the minimum that are necessary», the watchdog said, with previous proposals relating to ESG requirements in the 'internal controls' section of the Code having been ditched.
FCA: NDAs should not deter whistleblowers from reporting non-financial misconduct
These earlier proposals would have seen revisions to the Code specifying the role of company audit committees in overseeing a firm's expectations surrounding ESG considerations, expanding diversity and inclusion, and committee chairs' engagement with stakeholders.
Instead, corporate governance expectations for internal controls are set to remain unchanged, with the code setting out more generalised expectations for company boards to monitor and review annually their firm's risk management and internal control framework.
«It is for a Board to determine what should comprise its material internal controls,» the FRC said in a statement explaining its decision.
«The FRC is mindful that the needs for each business may vary and that the level of maturity of non-financial controls for some
Read more on investmentweek.co.uk
