Key Updates to the 2024 UK Corporate Governance Code

Introduction: What the Code Is and Who It Applies To

The UK Corporate Governance Code (the “Code”) sets out the principles of good governance for companies listed on the premium segment of the London Stock Exchange. Operating on a “comply or explain” basis, it requires companies either to apply its principles and provisions or to explain clearly and transparently why alternative arrangements are appropriate.

Although designed for premium-listed companies, the Code has influence far beyond this group. Many large private companies, financial institutions and investor-backed organisations voluntarily adopt its principles to demonstrate strong governance, attract investment and strengthen risk management. As such, changes to the Code are relevant to a wide range of organisations seeking to build resilient governance frameworks.

The Financial Reporting Council (FRC) published the latest update to the Code on 22 January 2024, with most provisions applying to accounting periods beginning on or after 1 January 2025 and a major new requirement taking effect in 2026.

Key Changes in the 2024 Code

1. Stronger Emphasis on Outcomes-Focused Governance

A central theme of the 2024 reforms is a shift from process-oriented disclosure to outcomes-focused governance reporting. Boards are now expected to articulate more clearly how their decisions, culture, policies and governance structures contribute to long-term sustainable success. This moves reporting beyond describing frameworks and towards explaining the real-world impact of board actions.

2. A New Board Declaration on Material Controls

The most significant change is the introduction of an annual board declaration on the effectiveness of all material controls—including financial, operational, compliance and non-financial reporting controls. Boards will be required to:

• Confirm whether their material controls were effective as at the balance sheet date.

• Explain how they monitored and reviewed the effectiveness of their risk and internal control frameworks.

• Disclose any material control deficiencies and how they are being remediated.

This new requirement (Provision 29) applies to financial years beginning on or after 1 January 2026. It represents an enhanced level of accountability and will require many organisations to reassess and strengthen their control environments.

3. Updated Expectations on Composition, Diversity and Evaluation

The Code refreshes its expectations on board composition and succession planning, introducing a more principles-based approach to diversity and inclusion. Key updates include:

• Broader framing of diversity expectations, without prescribing specific characteristics.

• Clearer requirements for board evaluations to consider composition, diversity and how effectively the board works together to achieve strategic objectives.

These changes reinforce the importance of inclusive leadership and effective board dynamics.

4. Streamlining and Removal of Duplicated Audit Provisions

The 2024 Code also removes several audit-related provisions that now sit within the separate Audit Committees and External Audit: Minimum Standard. The FRC has retained the Code’s five-section structure while simplifying and clarifying expectations to reduce duplication and improve usability.

Implications for Companies

For premium-listed companies, the reforms will necessitate enhanced governance reporting, strengthened oversight and more rigorous internal control processes. Organisations applying the Code voluntarily can also benefit from aligning with these enhanced standards. Key areas of focus will include:

• Demonstrating governance outcomes more robustly.

• Preparing for the new material controls declaration through improved assurance and documentation.

• Ensuring board evaluations, succession planning and diversity practices reflect modern expectations.

Conclusion

The 2024 update to the UK Corporate Governance Code introduces focused yet meaningful enhancements that elevate standards of transparency, accountability and internal control. While the Code is formally mandatory only for large, premium-listed corporates, its principles serve as a gold standard for governance across the UK corporate landscape. Smaller organisations, scale-ups and private companies can significantly strengthen their governance framework by using the Code as a bastion of good practice, improving both resilience and stakeholder confidence.