Wates Principles of Corporate Governance FRC Research Project

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INTRODUCTION The Financial Reporting Council sets the UK Corporate Governance and UK Stewardship Codes; sets UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality. The FRC works in the public interest. Our work is aimed at investors and others who rely on company reports, audit and high-quality risk management. BACKGROUND In June 2018 the UK Government introduced The Companies (Miscellaneous Reporting) Regulations 2018 (hereafter 'the Regulations'). These require all companies of a significant size, that were not already required to provide a corporate governance statement, to disclose their corporate governance arrangements. The Wates Corporate Governance Principles for Large Private Companies (hereafter 'the Wates Principles') were published by the FRC in December 2018. They provide a framework to help companies meet the legal requirements of the Regulations and to promote companies' long-term success. The Wates Principles encourage companies to adopt a set of core behaviours to secure trust and confidence among stakeholders and to benefit the economy and society in general. In 2020 the FRC contracted an independent external research team to provide an assessment of private companies' reporting on corporate governance in their 2019 annual reports. The research report was published in February 2022. We would like this new research project to now examine a sample of more recent private company reports and produce a comparison with the findings of the February 2022 research report. This will be done using the same principle-by-principle coding scheme . In addition we would like the new research to build on the previous principle-by-principle research by also assessing each company's governance disclosure as a whole. PROJECT OBJECTIVES The project will consider companies' reports with year-end dates from 1 June 2021 to 31 May 2022 . It will answer the following research questions: A) Of companies that were within scope of the Regulations for their reporting year-ending in the above range, which of them provided a Corporate Governance Statement to Companies House? B) Taking a representative sample of companies that chose to apply the Wates Principles, what was the quality of their disclosures on a principle-by-principle basis? C) Taking a (potentially smaller) representative sample of companies that chose to apply the Wates Principles, what was the quality of their governance reporting when read as a whole? The above is a summary only. PLEASE SEE THE ATTACHED INVITATION TO TENDER (ITT) FOR FULL DETAILS. Additional information: Notes:- • Download and review the documents • Observe the timelines and tender process • Register your interest in this opportunity by email to [email protected] • You will need to register your interest to receive the Q&A document.

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