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<p>The report rightly highlights the important role that internal audit can play in
helping companies to promote a positive corporate culture. The Financial Reporting
Council (FRC) strengthened the UK Corporate Governance Code in 2018 to provide for
company boards to assess and monitor culture, to ensure a link between culture, purpose,
values and strategy, and to report on this annually. The FRC’s latest annual review
of corporate governance reporting, published in November 2021, found some progress
in how companies report on their culture.</p><p> </p><p>Additionally, the Government
has set out proposals to give the FRC’s planned successor body – the Audit, Reporting
and Governance Authority – new powers to hold large companies to account for the quality
and usefulness of their corporate reporting, including reporting on culture. These
proposals were set out in the White Paper on ‘Restoring Trust in Audit and Corporate
Governance’ in 2021. The Government will be responding to that consultation in due
course.</p>
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