COVID-19: Corporate Governance & Reporting Issues – make it specific, make it realistic

We look at the key issues company boards should be aware of with regards to corporate governance and reporting in the midst of the COVID-19 crisis

By Thomas Rainey


The UK government and by extension the financial regulators have taken steps to show that they are cognisant of the fact that there will be a clear impact on  UK companies’ ability to display the ‘normal’ forms of corporate governance and reporting in light of the COVID-19 disruption. While there is no suggestion that this period will be viewed as some kind of amnesty for poorly-governed businesses or for inappropriate reporting, the notion that there may be some flexibility in what is expected is beginning to filter through to company boards.

In order to seek to assist boards to focus on what the general expectations are of them at this time, the Financial Reporting Council have published a number of guidance reports.


Of particular note in relation to governance, the FRC have advised that boards carefully consider the following:

  • Risk Management & Controls – Businesses must monitor the impact of staff working from home and the inaccessibility of office premises in relation to risk management processes and controls. They should consider whether additional controls need to be introduced in place of those made redundant or less applicable by the COVID-19 disruption.
  • Specific Policy Review – Businesses must check whether their key internal policies – such as AML, Modern Slavery, Data Protection etc. – require amendment or updating in light of COVID-19 and any necessary workplace or process changes that have taken place.
  • Management Information – Boards should carefully review information flow to ensure that they are continuing to receive appropriate levels of management critical information and also that they are continuing to be able effectively review and discuss the same as a collective.


The FRC also highlights that users of corporate reports are particular concerned at this time with seeing enough specific information to allow them to assess a company’s resilience in the face of COVID-19 disruption. In particular, investors are keen to see what financial resources are available to a business, and what the company is doing to manage expenditure and protect key assets.

In respect of corporate reporting, the FRC suggests boards should be looking to clarify the following in particular:

  • Strategic Report – Reporting should provide forward-looking information specific to that company and a clear assessment of the business’ viability, together with the methods used in that assessment.
  • Failure Risks – Boards should make a realistic assessment of what events or scenarios could lead to corporate failure, and set out possible mitigating steps.
  • COVID-19 Impact – Boards should consider what the impact would be on the business (inc. the value of its key assets) of longer or more severe social distancing measures being imposed, paying particular attention to cash resources and/or possible sources of new finance.

Summary – make it specific; make it realistic

The overriding impression the FRC has been giving in its rolling guidance is that what investors and other report users want to see in a company’s reporting, above all else, is:

  1. Details of specific steps taken to update governance policies to combat novel issues raised by COVID-19 workplace changes and general disruption.
  2. Clear, specific steps taken or due to be taken from a strategic standpoint by the company to seek to ensure its continuing viability in the short and long term.
  3. Realistic assessments of future risks that may affect the viability of the specific business in which the company is engaged, and clear steps for the boards strategy for mitigating any such risks.

For more information

About the issues discussed in this blog, please contact Thomas Rainey or another member of the Duane Morris London Team.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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