UK Corporate Governance Code 2024: Provision 29 Internal Controls Declaration Now in Force
Provision 29 of the UK Corporate Governance Code 2024 applies to financial years beginning on or after 1 January 2026. Boards must declare in the annual report whether their material internal controls were effective at the balance sheet date and describe how they monitored and reviewed them. First declarations appear in 2027 annual reports.
The 2024 UK Corporate Governance Code has applied to financial years beginning on or after 1 January 2025. Its one deferred change, Provision 29, applies to financial years beginning on or after 1 January 2026.
What Provision 29 requires
- The board describes in the annual report how it has monitored and reviewed the effectiveness of the company's risk management and internal control framework.
- It declares whether the company's material internal controls were effective at the balance sheet date, and explains any that were not and what is being done about them.
- The board decides which controls are material. The FRC's guidance covers financial, operational, reporting and compliance controls.
Who is affected
Companies that report against the Code on a comply or explain basis, mainly those with shares in the commercial companies category of the UK Listing Rules, their boards, audit committees and company secretaries.
What to do
Agree what counts as a material control, plan testing through the 2026 year so there is evidence for the declaration, update audit committee terms of reference, and report progress to the board regularly. First declarations appear in annual reports for 2026 year ends, published in 2027.