Restoring trust through risk management and internal control

Companies are facing more diverse, fast-moving and unpredictable risks than ever before. When faced with uncertainty and risk, the companies that are most successful are those with robust systems of governance, risk management and control that are designed not just to meet regulatory/compliance standards, but to add value and ensure that they can thrive safely. Strong internal controls are essential for shoring up the system, and have significant benefits on many levels, not least in rationalising operations, combating fraud and enhancing the quality of reporting.

Following its consultation on 'Restoring trust in audit and corporate governance' the Government asked the FRC to consult on strengthening the internal controls provisions in the UK Corporate Governance Code (the Code). Following an extensive consultation, the FRC issued the revised UK Corporate Governance Code, which includes the need for boards to make a declaration that all material controls are effective at the balance sheet date and the basis for that declaration. This will primarily impact premium listed companies and for some, could be a significant change from what they do today to comply with the existing requirements in the Code.

We have developed this guide to highlight the significant benefits of strong risk management and internal control, and what we believe are the key elements of a robust oversight, monitoring and review process that boards could use, both under today’s Code requirements and also to support their future declaration under the new Code.

We have also recorded a webinar highlighting the changes to the Code and discussing some of the key elements mentioned in our guide, we also put together number of FAQs that arose as part of our discussions.