The UK Financial Reporting Council (FRC) has unveiled plans for a shake-up of the country’s corporate governance code.

In a statement, the FRC said it will “take take account of work done by the FRC on corporate culture and succession planning” as well as the issues raised in the government’s green paper on corporate governance and an inquiry carried out by the business, energy, and industrial strategy (BEIS) select committee.

Speaking at the launch of the Institute of Chartered Secretaries and Administrators’ The Future of Governance initiative, Sir Win Bischoff, FRC chairman said: “The prime minister has a vision of an economy that, in her words, ‘works for everyone’. This needs UK businesses to thrive so that all stakeholders including workers, customers, suppliers and society itself benefit through jobs growth and prosperity.

“With all this in mind, we will conduct a review of the current UK corporate governance code. This will consider the appropriate balance between the code’s principles and provisions.”

He said that the review would not “throw out the baby with the bathwater” and would instead build on the “current strengths of UK governance” such as the unitary board, strong shareholder rights, the role of stewardship, and the FRC’s ‘comply or explain’ approach.

The FRC plans to launch a consultation on its proposals later this year following the conclusion of the BEIS review of UK corporate governance.

The consultation on the BEIS green paper closed on 17 February.

The green paper seeks comments on executive pay, strengthening the employee and customer voice, and corporate governance in large private businesses. 

Sarah Wilson, chief executive of Manifest Proxy, a provider of shareholder voting services, said she welcomed the FRC’s review in the light of corporate governance failings at the likes of Sports Direct and Royal Bank of Scotland.

“The prime minister and parliament have collectively expressed concerns about the lack of trust in business and investment,” she said. “That is deeply worrying, irrespective of your political point of view.

“Governance and stewardship have always been issues which go beyond the foundations of good accounting. The opportunity to involve a wider stakeholder base will be welcomed by many.

“Clearly the timing of the green paper, the FCA review [of banking culture], and now the FRC review shows that there remain deep concerns about the finance industry almost 10 years on from the Financial Crisis.

Ms Wilson added that she also expected the upcoming Brexit negotiations to impact upon the review.

“The extent to which UK company law, listing rules governance, and stewardship standards will take on a more UK-centric approach and how the FRC will work with overseas bodies remains to be seen, but clearly this is a priority for many.”

In its response to the BEIS green paper, the Pensions & Lifetime Savings Association – the UK’s pension fund trade body – called for new measures on executive pay. These included requiring a “super majority” of shareholders to back an executive pay policy, and for disclosure of the pay ratios between CEOs and UK employees throughout companies. ”This provides a useful insight into the culture and business model of a company,” the association said.