Companies Act 2014 section 1373

Corporate governance statement in the case of a traded company

Section 1373 requires traded companies to include a corporate governance statement in their directors' report, setting out details of the governance code they follow, their internal controls and risk management systems, shareholder meeting arrangements, and board composition, with specific obligations on auditors to review this statement.

• Traded companies must include a corporate governance statement as a specific section of the directors' report, covering the governance code applied, any departures from that code with reasons, internal control and risk management systems for financial reporting, shareholder meeting operations and rights, and board composition and committee structures.
• The statement may alternatively be published as a separate report — either attached to the balance sheet laid before the AGM and signed by two directors, published on the company's website with a reference in the directors' report, or annexed to the annual return.
• Statutory auditors must opine on whether the internal control, risk management, and takeover bid information is consistent with the financial statements and properly prepared, identify any material misstatements in that information, and confirm that the remaining required disclosures are included in the statement.
• Certain disclosure requirements do not apply where a traded company has only issued non-share securities on a regulated market, unless it also has shares traded on a multilateral trading facility.