UK Corporate Governance Review Pushes for More Outcome-Focused Reporting

Key Takeaways

• Stronger Areas: Companies show solid reporting on risk management and stakeholder engagement under the Wates Principles.
• Improvement Needed: Disclosures around purpose, board composition, and remuneration often lack meaningful insight.
• Focus on Outcomes: The FRC encourages clearer, outcomes-based explanations of how boards make decisions and drive long-term success.
• Reduce Duplication: Integrating reporting with improved cross-referencing can help avoid fragmented and repetitive disclosures.
• Framework Flexibility: The “Apply and Explain” approach remains a strength, but only when companies use it to demonstrate governance effectiveness beyond boilerplate narrative.

Deep Dive

The UK’s corporate governance watchdog is taking a closer look at how the country’s largest private companies explain their governance decisions and sees both progress and room to grow. In its first reporting insights since taking over oversight of the Wates Corporate Governance Principles earlier this year, the Financial Reporting Council (FRC) says many companies are using the framework effectively to articulate how boards oversee risk and engage with stakeholders. But when it comes to explaining corporate purpose, how boards are structured, and how directors are paid, disclosures are still often falling flat.

The Wates Principles were introduced in 2018 to give large private companies a flexible way to show they are governed responsibly. Rather than forcing compliance with detailed rules, the framework takes an “Apply and Explain” approach that encourages companies to describe the real actions and outcomes behind decisions made in the boardroom. And it’s that storytelling element that the regulator believes needs sharpening.

Many companies still rely on boilerplate language or repeat information across different sections of the annual report, the review found. In some cases, multiple contributors drafting separate slices of the report made it difficult for readers to follow how governance ties together with strategy.

The FRC suggests tackling the issue by focusing less on ticking boxes and more on demonstrating results: What did the board actually do? What changed because of it? How does governance support long-term success?

Mark Babington, the FRC’s Executive Director of Regulatory Standards, said that understanding how governance plays out in practice is what stakeholders value most.

The flexibility of the Wates Principles is their greatest strength, but companies need to use that flexibility to give stakeholders clearer insight into board decisions and outcomes.

The review highlights examples of companies getting this right, including those that link governance practices to their business purpose or explain how feedback from stakeholders influenced decisions. The FRC hopes these practical case studies will continue nudging governance reporting toward clarity rather than compliance-speak.

Good governance, the regulator notes, isn’t just a disclosure exercise. It’s a signal to investors, employees, customers and communities that a business is built for the long haul. And for private companies thinking about future growth, including potential public listings, strengthening those signals could pay dividends.

Companies that follow the Wates Principles are encouraged to spend time with the new insights, use more cross-referencing, cut duplication, and tighten the connection between their governance arrangements and the value they aim to create.

As the FRC continues working directly with companies and report users, the goal is clear: more meaningful transparency that reflects how governance actually drives the business forward, not just how it looks on paper.

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