The Financial Reporting Council has launched consultations on deliberately limited changes to some of its codes and standards.
A consultation on the UK Corporation Governance Code includes a request for FTSE 350 companies to put the external audit contract out to tender at least every 10 years. It also includes asking boards to explain why their annual reports are fair and balanced, encouraging more meaningful reporting by audit committees and proving more guidance on explanations provided to shareholders when a company does not follow the code.
The changes to the code, which sets out good practice for UK listed companies on issues such as board composition and risk management, give effect to the FRC's Effective Corporate Stewardship proposals.
Under the proposed changes to the Stewardship Code, published today in a separate consultation, the FRC aims to clarify what is meant by stewardship and the respective responsibilities of asset owners and asset managers.
It also asks investors to disclose their policy on stock lending and whether they recall lent stock for voting purposes.
An additional consultation, on proposed revisions to International Standards on Auditing for UK and Ireland addresses enhancing auditor communications. It also aims to extend auditor reporting.
FRC chair Baroness Hogg said: 'The revisions on which we are consulting this time are deliberately limited. We want to build on the proven track record of the UK Corporate Governance Code and the promising initial response to the Stewardship Code by reinforcing rather than fundamentally changing the codes. We will maintain the "comply or explain" approach to improving standards of governance and ownership.
'The auditing standard proposals are designed to enhance the relevance and value of the audit for users and the public by stimulating greater transparency about the judgments made by boards and auditors.'
The FRC expects the proposed changes to apply for financial years beginning on or after October 1 2012.