Despite the introduction of a new Corporate Governance Code this month, the Financial Reporting Council (FRC) warns that there is still a need for improvement in the quality of reporting against the Code, with a lack of ‘transparency and rigour in reporting’.

The FRC’s Annual Review of Corporate Governance Reporting stressed the importance of the Code’s comply or explain approach, which allows companies to depart from provisions when circumstances warrant, provided they offer high-quality explanations for their alternative approach.

There were still problems with an ‘inconsistent and unclear’ approach to reporting non-compliance and setting out explanations against the provisions.

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