Organisations' Strategic Shift Towards Corporate Governance Reform
Organisations Begin Preparing for Governance Code Reforms
A recent survey reveals that organisations are gearing up for the upcoming UK Corporate Governance Code reforms, a move anticipated to drive significant business value. The study indicates that a staggering 88% of audit, risk, and compliance professionals regard aligning with these new governance standards as crucial for their strategy in the coming years. This shift is especially evident in sectors such as industrial and technology, where the urgency to embrace these reforms is most pronounced.
The Importance of Governance Codes in Today's Business Climate
The implementation of the latest reform to the corporate governance code, set for early January 2025, is compelling companies across various industries to reassess their governance practices. Embracing the updated standards is seen as an opportunity not just to comply, but to enhance overall business performance. Organisations expect that these reforms will help them build resilience, ensuring their competitive edge in an increasingly volatile marketplace.
Key Findings from the Research Report
The comprehensive report sheds light on how organisations are strategizing to meet the UK Corporate Governance Code revisions. Here are some notable findings:
- Internal Gaps in Prioritisation and Confidence: There exists a discrepancy between how executives and managers perceive the importance of adherence to the governance reforms. While executives emphasize the necessity of compliance, managers express less urgency. Despite this, 86% of organisations are optimistic about meeting the compliance deadline by 2026, although regulatory compliance roles show slightly less confidence compared to others.
- Increased Workload Impacts Resource Allocation: The majority, approximately 89%, anticipate an uptick in their workload as they prepare for the implementation of the new governance code, underscoring a potential strain on operational resources, particularly among those already aligned with compliance.
- Widespread Use of AI in Governance: The study notes that over half of the organisations already utilize artificial intelligence to enhance their risk management and control programs. This includes using AI for automated control testing and gathering trend insights, indicating a growing reliance on technology to meet governance challenges.
Expert Insights on Corporate Governance Improvements
According to industry expert Jason Sechrist, EMEA Director of Product Solutions, the new governance code should be perceived not merely as a checklist but as a strategic opportunity. He asserts that the reforms provide a valuable chance for organisations to advance their internal control methodologies and strengthen decision-making processes. By standardizing their risk and control management approaches, companies can not only achieve compliance but also establish a lasting competitive advantage.
Preparing for the Code Reforms
AuditBoard is committed to assisting organisations in navigating the complexities of the upcoming UK Corporate Governance Code reforms. The insights gathered from the research report highlight significant readiness among businesses, but also point out areas that require attention to ensure a seamless transition.
Methodology of the Research
To gather the insights presented in the report, AuditBoard collaborated with Ascend2 Research to conduct an in-depth survey. 264 respondents, including internal audit professionals and organisational leaders from enterprises with revenues exceeding $25M, participated in the study. The aim was to understand better how these leaders are preparing for and managing changes related to the UK Corporate Governance Code revision.
About AuditBoard
As a leader in cloud-based solutions, AuditBoard is reshaping the landscape for audit, risk, compliance, and ESG management. Many Fortune 500 companies use AuditBoard to enhance clarity and responsiveness in their operations. The platform is highly rated across multiple review sites and has been recognized for its rapid growth in the technology sector. For additional insights, visit AuditBoard.com.
Frequently Asked Questions
What is the main focus of the latest UK Corporate Governance reforms?
The primary goal is to enhance organisational governance standards, improving compliance and overall business performance.
How do companies plan to meet the new governance code?
Companies are developing strategies to align their practices with the new standards, often leveraging technology and AI to facilitate compliance.
Why are executives more confident about compliance than managers?
This discrepancy may arise from differing priorities and perspectives on the urgency of adherence to governance reforms within the organisation.
What role does AI play in governance according to the survey?
AI is increasingly used by many organisations for risk management and control processes, improving efficiency and effectiveness in compliance efforts.
How can businesses view the governance code reform cycle?
Business leaders should perceive the reforms as an opportunity for strategic improvement rather than merely a compliance checklist.
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