The UK’s corporate governance code will be overhauled for the first time in four years with new rules to make boards more responsible for fraud and their company’s finances, and strengthen accountability for bad behaviour.

The Financial Reporting Council, which oversees the audit industry, on Tuesday laid out plans to carry out recommendations made by the government earlier this year to reform corporate governance.

The document includes revising existing corporate codes, strengthening auditing and accounting standards, and setting out expectations to drive behavioural change ahead of statutory powers promised under forthcoming legislation.

The beefed up UK corporate governance code is designed to provide a stronger framework for reporting on the effectiveness of internal controls and board responsibilities for expanded sustainability and reporting of environmental, social and governance principles.

There will also be new guidance on fraud reporting by directors, with provisions expected to recommend that certain minimum clawback conditions on pay are included in directors’ remuneration arrangements in the event of corporate failures.

Audit watchdog to overhaul UK corporate governance code | Financial Times