Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the effectiveness of the Corporate Governance Code’s comply or explain regime.

The Financial Reporting Council (FRC) is responsible for the UK Corporate Governance Code. The FRC reviews the quality of reporting annually. The most recent review was published in November 2020 (Review of Corporate Governance Reporting) and assessed reporting of a sample of 100 companies in the FTSE350. This was followed by the publication in February 2021 of a report “Improving the quality of ‘comply or explain’ reporting” which encouraged companies to offer better transparency when departing from Code Provisions, and set out the elements to be included within a good quality explanation.

The FRC also works with independent organisations to research specific areas of reporting. This year two reports have been issued, one on remuneration reporting (May 2021) undertaken by the University of Portsmouth and the second an assessment of workforce engagement (June 2021) undertaken by Royal Holloway, University of London and the Involvement and Participation Association.

All these reports demonstrate areas of innovation, good practice and improved transparency by companies following the Code.