The UK Financial Reporting Council (FRC) is consulting on proposed changes to the UK Corporate Governance Code, which applies to publically listed companies. The CIPD’s response focused on proposals relating to:

•    equality, diversity and inclusion (EDI)
•    environmental, social and corporate governance (ESG) 
•    succession planning
•    remuneration. 

“We would like to see greater emphasis on the importance of people governance as well as financial governance, and greater recognition of the role that HR can play in supporting boards.” 

Susannah Haan, Senior Corporate Governance Adviser, CIPD

In our submission to the FRC, we highlight the key importance of HR expertise on boards, as developed in our report on The Value of People Expertise on Boards 2023, which was based on interviews with chief people officers among our senior HR members. We also see a need for director training on EDI. 
We support the overall direction of the consultation, but we have reservations regarding: 

  • Too much emphasis on financial rather than people governance and expertise (although we recognise that this was the mandate given to FRC by government) 
  • The need to consider the balance of skills and experience of the whole board as a team, in addition to the skills of the individual members, and to explain how the team make-up matches the challenges faced by the company.
  • The description of merit as separate from objective criteria in succession planning, which is not in line with EDI good practice.
  • An ever-increasing role for the audit committee with new proposals around sustainability disclosures, potentially at the expense of other committees. 

Read our full response

Our response to the Financial Reporting Council
PDF document 359.3 KB

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