FRC Chair calls for robust adherence to the UK Corporate Governance Code

In letters sent to chairs of listed companies, investors and proxy advisors, Win Bischoff, Chair of the Financial Reporting Council (FRC), regulator responsible for the UK Corporate Governance and Stewardship Codes, requested that companies work diligently to report their governance practices. The letters were published on July 20 after the recent review of the UK Code.
Bischoff highlighted that the improvement of corporate governance depends on the actions that boards and companies take. According to him, by explaining not only the practices adopted, but also those not adopted, the company has the opportunity to clarify important matters. He also pointed out that investors and proxy advisors, responsible for demanding quality information, play a crucial role in avoiding a “box-ticking” approach. According to the FRC, each market agent has a role in making the code a success.
The UK reflection is an example for the Brazilian market, especially now that the deadline for the mandatory disclosure of the Report on the Brazilian Code of Best Practices of Corporate Governance is getting closer. For the first time ever, all Brazilian companies are subject to a single set of governance practices that, as in the UK market, follows the “comply or explain” approach. According to the document, “the descriptions and explanations should be accessible, transparent, complete, objective and precise so that shareholders, investors and the remaining stakeholders can make a comprehensive and careful evaluation of the company.” All companies listed in the Ibo vespa and IBrx-100 indexes must disclose their first Report by October 31. From 2019 on, the disclosure of the document by the end of July of each year is mandatory for all listed companies.
The three FRC’s letter are available here.