• Penelope Kenny

Corporate Governance and brexit- where will we go?


We can no longer look to the UK Financial Reporting Council (FRC) as a key source for Corporate governance initiatives and thinking. The UK corporate governance code itself is changing, as is the role of the FRC. We will need to look closer to EU initiatives and EU Directives will become increasingly important, for Irish companies. Additionally the emphasis of corporate governance is shifting to a greater focus on the interests of consumers of financial information, not producers, as per the Kingman review below. Additionally, the purpose is shifting to a more community and social responsibility viewpoint, fostering inclusive economic development and growth as cited in the Guide to Corporate Governance Practices in the European Union (see below).


The Kingman Review and Brexit; radical change is possible. The Kingman Review, released in December 2018 at the request of the Secretary of State, calls for the end of the Financial Reporting Council (FRC), which publishes the Corporate Governance Code and oversees audit. The report calls for a replacement of the FRC with an agency that “is firmly focused on the interests of consumers of financial information, not producers.”

This could mean comprehensive changes in the Code itself, along with the entire philosophy of corporate governance in the UK. And with the EU out of the picture, change could be pervasive.

“Is the FRC right for a post-Brexit world where the framework within which the UK operates will have fundamentally changed?” asks the London-based accounting firm BDO in a recent noteThe Financial reporting Council (FRC) of the UK may well become a non-EU regulator." https://diligent.com/en-gb/blog/brexit-and-uk-corporate-governance/


A Guide to Corporate Governance Practices in the European Union G20/OECD by the EUROPEAN CONFEDERATION OF DIRECTORS’ ASSOCIATIONS and published by the International Finance Corporation. They state that the IFC has long focused on corporate governance as part of our broader efforts to promote private sector investment, strengthen capital markets, and foster inclusive economic development and growth. (my italics). The guide states "Adopting corporate governance best practices improves competitiveness and can lead to improved access to external financing, a lower cost of capital, improved operational performance, increased company valuation and improved share performance, improved company reputation, and reduced risk of corporate crises and scandals".


Principles of Corporate Governance OECD (2015),The Principles are presented in six different chapters: I) Ensuring the basis for an effective corporate governance framework; II) The rights and equitable treatment of shareholders and key ownership functions; III) Institutional investors, stock markets, and other intermediaries; IV) The role of stakeholders; V) Disclosure and transparency; and VI) The responsibilities of

the board.

Corporate governance in ireland after Brexit


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