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Disclosure Requirements

Our Corporate Governance Disclosure Checklists cover the following sources of corporate governance material published by the Financial Reporting Council (FRC) and the UK Listing Authority:

These checklists are updated as often as required to reflect any revisions in the source documents. 

The updated Guidance on Audit Committees has introduced a number of new disclosures which reflect the changes to the Code along with other good practice. Additional disclosure recommendations in the audit committee report include:

  • how the audit committee composition requirements have been addressed;
  • how the performance evaluation of the audit committee has been conducted;
  • the current external audit partner’s name and for how long the partner has held the role;
  • advance notice of any plans for retendering of the external audit;
  • the committee’s policy for approval of non-audit services;
  • the audit fees for the statutory audit of the company’s consolidated financial statements and the fees paid to the auditor and its network firms for audit related services and other non-audit services, including the ration of audit to non-audit work;
  • for each significant engagement, or category of engagements, an explanation of the services provided and why the audit committee concluded that it was in the interests of the company to purchase them from the external auditor;
  • and explanation of how the committee has assessed the effectiveness of internal audit and satisfied itself that the quality, experience and expertise of the function is appropriate for the business;
  • the nature and extent of interaction (if any) with the FRC’s Corporate Reporting Review team;
  • when a company’s audit has been reviewed by the FRC’s Audit Quality Review team, disclosures about significant findings and the resulting actions they and the auditors plan to take. This disclosure should not include the audit quality category awarded.

Disclosures under the 2014 Code

Our Corporate Governance Disclosure Checklist (For periods commencing on or after 1 October 2014) covers the disclosure requirements as a result of the 2014 Code amendments. Significant changes include:

Going Concern

The September 2014 amendments introduced a requirement that, in addition to a statement that the business is a going concern, the directors will also have to make another statement indicating that they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over an assessed period, the length of which must also be disclosed. In addition, the directors' responsibility for risk management is enhanced to include making a robust assessment of the principal risks facing the company and a specific responsibility for monitoring the company's risk management and internal control systems.

Risk management and internal control

Directors are required to confirm in the annual report that they have carried out a robust assessment of the principal risks facing the company, including those that would threaten its business model, future performance, solvency or liquidity.

Directors are required to describe those risks and explain how they are being managed or mitigated

Relations with shareholders

The September 2014 amendments included a provision requiring companies to explain what action they intend to take in response to situations where a significant proportion of votes have been cast against a resolution at any general meeting. This is particularly relevant to resolutions on directors' remuneration.

The FRC also publishes the UK Stewardship Code which sets out good practice as to how investors interact with investee companies.  The FRC asks investors to report on a ‘comply or explain’ basis and the Financial Conduct Authority requires certain investors to do so or else explain their alternative strategy to achieve the same aims.   

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.