The Financial Reporting Council (FRC) has launched a consultation paper seeking views on proposed changes to the UK Corporate Governance Code, guidance for boards of listed companies and standards for auditors covering risk management and reporting. Supplementary guidance for directors of all banks is also being issued.

The proposals focus on risk management by boards and communication to the providers of risk capital about the risks faced by companies in which they invest and how they are managed or mitigated.

The new proposals outline how the FRC intends to implement the recommendations of Lord Sharman’s 2012 Inquiry "Going Concern and Liquidity Risks: Lessons for companies and auditors" which looked at the corporate governance and reporting lessons to be learnt from the failure of ostensibly healthy businesses in the financial crisis.

The FRC has decided to consolidate its guidance on risk management and internal control with the assessment of the going concern basis of accounting, thereby encouraging the integrated assessment and reporting recommended by Lord Sharman. The draft guidance would replace "Internal Control: Guidance for Directors"(2005), and "Going Concern and Liquidity Risk: Guidance for Directors" (2009).

The consultation runs until 24 January 2014 and revised guidance is expected to be published in the first half of 2014 to take effect simultaneously with proposed changes to the UK Corporate Governance Code.