FRC Explores Risk Management Best Practice by UK Company Boards
The Financial Reporting Council (FRC) is to bring together company directors, investors and others to explore how companies are responding to the new UK Corporate Governance Code provision on board’s responsibilities for risk. The FRC will consider whether the Turnbull Guidance on risk and internal control needs to be amended in the light of these meetings.
Stephen Haddrill, chief executive of the FRC, said in a speech to Audit Committee Chairs that the FRC wished to explore how companies were responding to the new principle in the UK Corporate Governance Code that boards are responsible for determining the nature and extent of the significant risks they are willing to take in achieving their strategic objectives. He noted that there is a lot of deep reflection currently underway in boardrooms and committees, and that it was premature for the FRC to amend current guidance before new good practice had the chance to develop.
As a result, the FRC will be holding a series of meetings in the new year. Board chairs, audit and risk committee chairs, executives, investors and advisers will be invited to share their views and experience.
Following the meetings, the FRC will decide how it can most usefully help boards and committees, including through an update of the Turnbull guidance on risk management and internal controls if there is a need for this.