Corporate reporting – FRC publishes annual review of corporate governance reporting

The Financial Reporting Council (FRC) has published its annual review of corporate governance reporting for 2025, which discusses the quality of reporting against the UK Corporate Governance Code 2018.

This follows the release of the FRC’s annual review of corporate reporting in the 2024/2025 reporting season more generally (see our blog post here for further details).

This is the last review which will look at reporting against the 2018 version of the Code. The 2024 version of the Code applies to financial years starting on or after 1 January 2025 (except for the changes to reporting on risk management and internal controls in Provision 29 which will apply to financial years beginning on or after 1 January 2026).

The FRC reviewed the reporting of 100 UK listed companies and sets out specific examples of good reporting against the Code, as well as areas where there is room for improvement.

Points of particular interest include:

• Explaining departures from the Code – 25 of the 100 companies reviewed disclosed a departure from at least one Code provision in their annual report, with the most common departures relating to audit committee composition, chair independence and tenure;
• Opportunities for reducing reports – the FRC identified many areas of boilerplate language, and repetitive and generic disclosures in the reports reviewed and has set out areas where companies could reduce their reporting;
• Risk management and internal controls – although companies are not yet required to report against the new Provision 29, more than half of the companies reviewed mentioned the new provision, with many including information on how they are preparing for it;
• Cybersecurity – 85% of companies reviewed included cybersecurity as a principal risk and 66% discussed how the board and board committees are involved in the mitigation or monitoring of cyber risks; and
• AI – 86% of companies mentioned AI in their annual report, but only one company disclosed using AI in its reporting.