Expertise: Regulatory reporting solutions > UK corporate governance reform

Get ready for UK Corporate Governance Code compliance with VantagePoint 

UK corporate governance

The UK Corporate Governance Code (the Code) has undergone reform and companies falling under its remit need to act now, if they have not already done so. The Code is mandatory for UK premium listed companies (on a “comply or explain” basis) but all companies should have appropriate systems in place. 

Following a number of independent reviews on UK corporate governance, the UK government issued a consultation on 'Restoring trust in audit and corporate governance' in 2022, then announced in its response statement that it intended to ask the Financial Reporting Council (FRC) to consult on strengthening the risk management and internal controls provisions in the Code.  In some quarters, this was referred to as “UK SOX”. 

In January 2024, the FRC issued its updated UK Corporate Governance Code, effective 1 January 2025, with annual monitoring of risk management and internal control frameworks required from 1 January 2026. 

Key requirements of the new UK Corporate Governance Code

Identification of material controls

Identification of all material controls that address any key risk faced by the organisation, including but not limited to internal controls over financial reporting.

Annual controls declaration by the board

An explicit annual controls declaration by the board on the effectiveness of all material controls at the balance sheet date.

Material control deficiencies

A description of material control deficiencies including the action taken or proposed to address these.

Details of monitoring by the board

A description of how the board has monitored the effectiveness of its risk management and internal control framework, including whether and to what extent external assurance is required. 

All businesses should act now

The work involved cannot be underestimated, nor is it likely that the board-led approach in the new Code will continue if the market does not lead to more explicit and robust disclosures. 

The Government decided to veer away from more explicit requirements which were to be articulated in the Audit and Assurance Policy (AAP), but a lot of work went into the AAP and the need for it is still very much present. Organisations should prepare now, as the AAP or similar could still come into legislation sooner or later.

Our experts can help you prepare and enact compliance with the new Code for your organisation. Get in touch today to see how we can help you comply.

How it works

The benefits of a strong risk management and internal control framework are significant and go beyond mere compliance.

Improving your control framework can provide better visibility to management over your organisation, leading to better decision making, improved credibility over your numbers, shareholder value increased, better prevention and detection of fraud and error and more. 

Step 1
Scope

Clarify responsibilities and scope material risks.

Step 2
Document

Define and document material controls.

Step 3
Assess

Develop assurance to assess control effectiveness.

→ Get more details about our consulting process
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Step 1: Clarify responsibilities and scope material risks 

Consider top-down how you identify, own and manage the key risks in your organisation and what existing assurance you have over those risks. 

Clarify responsibilities where they are unclear and scope material risks and the controls that mitigate these. 

Identify gaps where these are unclear. 

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Step 2: Define and document material controls

Documentation of material controls is a critical step, being those controls most relied upon to address material risks. 

Controls should be clearly defined with sufficient detail to be clear exactly what happens when and what evidence is retained to demonstrate effective operation. 

A central GRC tool should be used as a single source of truth, to guarantee everyone is accessing the same data, and that it's linked and consistent. 



 
 

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Step 3: Develop assurance to assess control effectiveness

Boards need to consider the level of assurance required against material controls, including the extent to which independent testing or external assurance may be required. 

When building an assurance programme, it is essential that enough time is built in for a trial run to identify issues and fix errors. 

Our advice is to start now, allowing one year for scoping, planning, implementation and training, then a further year for trialing. 

We can provide the support you need to be compliant with the new code. Get in touch with our GRC experts today, who will be more than happy to discuss your needs.

Speak to a GRC expert

Act now to consider where improvements can be made to internal controls over financial reporting

Strengthening internal controls around finance reporting has significant benefits across a company including: 

  • Increased credibility for financial reporting. Improved quality and reliability of finance reports increases shareholder and investor trust and confidence in your company’s financial reports. 
  • Better safeguarding of shareholder value. A strong internal reporting framework drives high-quality standards through improved accountability and organisation. 
  • Improved fraud prevention and detection. Helps highlight where a firm's potential key fraud risks are, and whether control measures are in place to mitigate risk. 
  • Better management information to aid better decision making. Real-time management reporting and insights to drive improved decisions 
  • Streamlined and improved operations. Effective controls and improved reporting increase accountability and trust, both within the company and externally. 

Frida Tidqvist

Nasdaq - Associate Vice President Financial Reporting

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