UK Law and Practice Contributed by: Gareth Sykes, James Palmer, Isobel Hoyle and Hannah Whitney, Herbert Smith Freehills Kramer
prevented from undertaking certain non-audit services for the company. 7.2 Requirements for Directors Concerning Management Risk and Internal Controls The Governance Code places requirements on companies listed in the ESCC category to con - firm within their annual report that they have car - ried out a robust assessment of the company’s emerging and principal risks. Directors are also required to: • explain how risks are being managed or mitigated; • explain how they have assessed the pros - pects of the company; and • state whether they have a reasonable expec - tation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of the board’s assessment.
In addition, to assess the company’s financial risks and controls, listed companies are required to appoint an audit committee of non-executive directors, whose role is to ensure that sharehold - er interests are properly protected in relation to financial reporting.
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