In its submission, ACCA says the code must be shortened and sharpened, as well as making sure it mirrors current thinking about corporate governance and culture, acknowledging that the role of the board is much broader than wealth maximisation.

Jo Iwasaki, head of corporate governance at ACCA, said: ‘Over 25 years of application and development, the code has lost some of its original clarity and consistency: and this consultation process is the ideal opportunity to bring it back to core principles.

‘If we shorten the code to clear principles, supported by “comply or explain” provisions, it can most effectively function as a framework document which can be used across all sectors and organisations.’

ACCA also wants to see the code to focus on outcomes over procedures, as part of a more comprehensive and nuanced view of corporate governance.

Iwasaki said: ‘The code can most effectively encourage business to consider this holistic approach to corporate governance by putting its focus on intended outcomes, rather than isolated actions, details or procedures.

‘What matters is not simply what companies have done, but more so what they have achieved by doing it. An outcome-focused framework requires companies to think independently about how to apply the principles to achieve this outcome – and therefore encourages a more meaningful exercise.’

ACCA’s comments to the FRC on the UK Corporate Governance Code and Guidance on Board Effectiveness are available in full here.

Report by Pat Sweet