Chief Executive of the Chartered Institute of Internal Auditors, Dr Ian Peters, has today welcomed the Financial Reporting Council’s (FRC) proposed revisions of the Corporate Governance Code.
The FRC is inviting feedback on its new version of the Code, which is being updated to reflect the changing business environment and to help UK companies achieve the highest levels of governance.
“The Chartered Institute of Internal Auditors welcomes the proposed revisions and is pleased to contribute to the review as part of the FRC’s stakeholder advisory panel,” Dr Peters said.
“It is critical for the UK that we have a corporate governance framework in place that reflects the responsibilities of companies not only to their shareholders, but also to employees, customers and the wider community.
“I am especially pleased to see the new version of the Code is shorter and sharper and provides greater clarity for organisations on how they should promote good corporate governance.
“The Institute has long recognised the importance of the ‘tone at the top’, and the fact that internal auditors are critical to providing assurance about corporate culture, and so the inclusion of culture as a priority throughout the proposed Code is also welcomed.
“That internal audit has been given greater prominence throughout the document is testament to the growing recognition of the need for internal audit in all major companies.”
Established in 1948, the Chartered Institute of Internal Auditors is the leading professional body for internal auditors in the UK and Ireland, and has almost 10,000 members in all sectors of the economy.
Internal auditors can act as a powerful early warning system, assessing whether organisations are adequately managing all the major risks facing them, including poor corporate culture.
The Institute has also launched its own consultation to inform its position on the FRC’s proposed changes, which is open to feedback from internal auditors until Friday 8 December.
“One area the Chartered IIA would like to see greater clarity on is the policing of the Code, and what happens to companies when they fail to either ‘comply’ or ‘explain’,” Dr Peters said.
“It is important that corporate governance does not become a “tick-box” exercise for boards, and that the proposed changes provide an opportunity for internal audit to showcase its skills.
“We look forward to continue working with the FRC on the stakeholder advisory panel.”