The revisions to the Code (and the associated FRC Guidance on Audit Committees) – which will be effective for periods beginning on or after 1 October 2012 - address four key areas:
- Fair, balanced and understandable annual reports;
- Greater disclosure around audit committee activities;
- External audit tenders (FTSE 350 companies only); and
- Boardroom diversity.
Companies are also encouraged to provide fuller explanations to shareholders as to why they choose not to follow any Code provision. As with the existing Code, the changes fall within the ‘comply or explain’ framework.