Frc suspends corporate governance code

A specific and timely topic!

FRC (Financial Reporting Council) suspends Corporate Governance Code:

On March 25, 2020, the Financial Reporting Council (FRC) announced that it would suspend the UK Corporate Governance Code (the "Code") for a period of six months, effective from April 1, 2020. This decision was taken in response to the COVID-19 pandemic and its impact on businesses and the economy.

The FRC, which is responsible for promoting high-quality corporate governance in the UK, suspended the Code to provide companies with greater flexibility and discretion in their decision-making during this challenging period. The suspension aims to help companies focus on their core business activities and respond to the pandemic without being unduly constrained by the Code's requirements.

Key aspects of the suspension:

  1. Relaxation of reporting requirements: Companies will not be required to report on their compliance with the Code for the 2020 reporting period.
  2. Flexibility in decision-making: Companies will have greater flexibility in their decision-making processes, allowing them to respond quickly and effectively to the pandemic.
  3. No enforcement action: The FRC will not take enforcement action against companies that do not comply with the Code during the suspension period.

The FRC emphasized that the suspension is not a relaxation of the Code's principles, but rather a temporary measure to help companies navigate the pandemic. The Code's principles, such as transparency, accountability, and fairness, remain essential for maintaining trust in the UK's capital markets.

The suspension is expected to be reviewed and potentially extended or modified as the pandemic evolves and the economic situation changes.

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