The Financial Reporting Council (FRC) has released its Annual Review of Corporate Governance Reporting, providing an analysis of reporting trends and practices among 100 UK-listed companies in relation to the 2018 UK Corporate Governance Code.  

In future, annual reports will be analysed against the updated 2024 Code, which came into force in January 2025, stated FRC. 

FRC also stated that a significant finding reveals that more companies are now offering clear, detailed, and relevant explanations when they choose not to follow specific Code provisions. 

The review underscores that this flexibility is a fundamental advantage of the Code, as it allows organisations to adapt their governance practices to suit their unique situations while still upholding transparency and building trust. 

The analysis revealed that 25 companies reported deviations from at least one provision of the Code, most frequently concerning the composition of the audit committee, the independence of the chair, and the length of tenure.  

However, many organisations demonstrated strong governance practices by offering detailed explanations for these departures, clearly outlining their reasoning and describing the alternative governance measures they had implemented. 

The review also showcased examples of effective practices, noting that companies are maintaining insightful, high-level commentary and directing readers to specific, relevant sections of their annual reports.  

This strategy allows companies to clearly communicate their governance practices while avoiding overly lengthy or redundant disclosures, FRC stated.  

The review also assessed how companies are preparing to implement the new Provision 29 on risk management and internal controls, as set out in the 2024 Corporate Governance Code, which will apply to financial years beginning on or after 1 January 2026. Over half of the companies surveyed referenced the forthcoming provision, and many offered specific insights into the steps they are taking to get ready. 

The FRC has released a series of podcasts designed to help companies enhance their reporting in areas addressed by the Code. Additionally, a webinar will be held on 20 November 2025, to provide an in-depth discussion of the review’s findings. 

The FRC has also recently revised its Corporate Governance Code Guidance to provide clearer direction on the flexibility companies have in setting remuneration for non-executive directors.

In the latest episode of the FRC’s “In Conversation” podcast, Kate O’Neill explores these updates with Jessica Dahlstrom, Head of Corporate Governance, and Kelvin Ernest, Senior Corporate Governance Policy Associate, discussing how the changes enhance clarity around remuneration practices under the Code.