The UK Corporate Governance Code
The UK Corporate Governance Code

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • The UK Corporate Governance Code
  • Versions
  • Application
  • Principles and provisions
  • Compliance and reporting
  • Shareholder engagement
  • Corporate governance statement
  • Board committees
  • Making documents and information available
  • Corporate governance codes for particular types of company

This Practice Note summarises the application, purpose and provisions of the UK Corporate Governance Code (UKCG Code), which is administered by the Financial Reporting Council (FRC). Also discussed are related recommendations and guidance issued by the FRC, the Chartered Governance Institute (previously known as ICSA: The Governance Institute) (CGI) and various investor bodies, and recent and expected developments in the corporate governance sphere.

The first version of the UKCG Code was produced in 1992 by the Cadbury Committee. Its paragraph 2.5 is still the classic definition of the context of the UKCG Code:

'Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to laws, regulations and the shareholders in general meeting.'

The introduction to the 2018 version of the UKCG Code notes that the definition remains true today, but emphasises the fact that companies do not exist in isolation. To succeed in the long-term, directors and companies need