The UK's corporate governance landscape could be set for set for a wholesale changes after the Financial Reporting Council (FRC) announced a wide-ranging review of the corporate governance code. This will take into account the regulator's recent work on corporate culture and succession planning, as well as the issues raised in the government’s green paper and the Business, Energy and Industrial Strategy parliamentary select committee inquiry.

The FRC said that the review will build on the UK code's globally recognised strengths developed over the past 25 years while also considering the appropriate balance between its principles and provisions and the growing demands on the corporate governance framework. To guide the review the FRC said it would seek input from a wide range of stakeholders including its recently established stakeholder advisory panel of high profile representatives from a wide variety of sectors.

Sir Win Bischoff, chairman of the FRC, said the review would "consider the appropriate balance between the code’s principles and provisions.  In pursuing any changes, the current strengths of UK governance: the unitary board, strong shareholder rights, the role of stewardship and the ‘comply or explain’ approach, must be preserved. We must not throw out the baby with the bathwater. Any changes to the regulatory frameworks and to the Code will be done carefully and through full consultation with a wide range of stakeholders.”

The FRC said it would consult on its proposals later in 2017, based on the outcome of the review and the government’s response to its green paper.

Bischoff was speaking at the launch of a series of papers from the company secretaries' professional body,  ICSA, entitled The Future of Governance. Chris Hodge, policy adviser to ICSA and former director of corporate governance at the FRC, has written the first paper, Untangling Corporate Governance, in which he argues that the different elements of governance need to be separated if we are to address them effectively.

Among his recommendations for improving corporate governance are for effective legal sanctions to be introduced to punish bad business behaviour; for a policy re-think of how to address income inequality and for an improvement in the effectiveness of the various mechanisms by which listed companies are held to account.

Speaking at the launch event Hodge said: "The regulatory framework for corporate governance has not fundamentally changed since it was established 25 years ago, but our expectations of what it should be able to achieve have. The perceived purpose of governance has gone from being “better oversight” to “saving capitalism."