As we approach January 2025, boards across the UK are facing the introduction of the revised UK Corporate Governance Code 2024. This new version, which builds on the 2018 Code, places greater emphasis on internal controls, stakeholder engagement, and long-term sustainability. While some of the changes are evolutionary, others require boards to reassess their governance practices and structures to ensure they remain compliant and effective.
As an executive search and board advisory firm, Hoffmann Reed is here to help boards navigate these changes. Whether it’s recruiting new non-executive directors (NEDs) to strengthen your board’s composition or conducting board effectiveness reviews, we can provide the support your organization needs to meet the demands of the 2024 Code.
Key Changes from the 2018 to the UK Corporate Governance Code 2024
Increased Focus on Internal Controls and Risk Management
One of the most significant changes in the 2024 Code is the strengthened focus on internal controls. Boards are now required to demonstrate the effectiveness of their internal control frameworks through a formal declaration. This change, outlined in Provision 29 of the 2024 Code, aims to enhance transparency and investor confidence. However, reporting on internal controls will not be mandatory until accounting periods beginning on or after January 2026, giving boards time to adjust.
Our advice:
This shift requires boards to evaluate whether they have the necessary skills and expertise in risk management and internal controls. Hoffmann Reed can assist in assessing your board’s current capabilities and, where needed, recruit NEDs with specialized expertise.
Board Composition and Diversity
The 2024 Code continues to emphasize the importance of diversity on boards. However, there is a more explicit focus on succession planning and ensuring that boards have the right mix of skills and experience to support the company’s long-term success. Boards are now expected to go beyond compliance demonstrating how their composition supports strategic objectives and promotes sustainable value creation.
Our advice:
Diversity isn’t just about gender or ethnicity—it’s also about diversity of thought, experience, and skills. We can help you develop a robust succession plan and bring in directors with the fresh perspectives needed to drive long-term success.
More Rigorous Board Evaluations
The new Code enhances the expectations around board performance evaluations. FTSE 350 companies are now required to conduct externally facilitated reviews every three years. These evaluations should not only assess board performance but also focus on the outcomes and the board’s effectiveness in steering the company toward its strategic goals.
Our advice:
Conducting a thorough board effectiveness survey is key to identifying gaps and areas for improvement. Hoffmann Reed can provide an objective, external perspective by conducting these evaluations, ensuring your board is well-positioned for future challenges.
Strengthening Stakeholder Engagement
Another important aspect of the 2024 Code is the expectation for boards to engage more meaningfully with stakeholders, particularly employees and shareholders. Provision 5 emphasizes the need for boards to maintain effective engagement mechanisms with their workforce. This can be done either through a designated NED, a workforce advisory panel, or other alternative arrangements.
Our advice:
Boards must be proactive in ensuring that they are hearing the views of all stakeholders, especially as stakeholder expectations evolve. We assist in identifying NEDs who are skilled in stakeholder engagement or advising on best practices for improving board-stakeholder interactions.
Executive Remuneration and Shareholding Policies
The 2024 Code tightens provisions around executive remuneration, ensuring that pay is aligned with company performance and long-term success. In particular, companies are encouraged to promote long-term shareholdings by executive directors, with new policies around post-employment shareholding requirements.
Our advice:
As boards reassess their remuneration strategies in line with the new Code, they must ensure that their remuneration committees are equipped to provide independent and expert guidance. We help boards recruit experienced NEDs to serve on these committees and ensure they are prepared to meet the heightened expectations around executive remuneration.
Are You Ready?
The 2024 UK Corporate Governance Code signals a continued shift towards greater accountability, transparency, and long-term thinking for boards. As these changes take effect, boards will need to evaluate their composition, governance structures, and stakeholder engagement strategies.
At Hoffmann Reed, we specialize in helping organizations build boards that are not only compliant but also forward-thinking and resilient. Whether you need to recruit new board members, conduct a board effectiveness review, or seek expert advice on how to align your governance practices with the UK Corporate Governance Code 2024 , we are here to help.
Get in touch with us today to ensure your board is ready for 2025 and beyond.
Paul Battye can be contacted on 0203 500 0352.
Download the FRCs UK Corporate Governance Code 2024 please click here
Read our article on “Essential Skills and Experience for an Effective Pension Scheme Trustee Board” please click here
Check out our Chairman Joe Screnci’s article “Academics on Boards – good idea or not?” please click here