Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government what assessment they have made of the Chartered Institute of Internal Auditors' report, Cultivating a healthy culture, dated March 2022; and what steps, if any, they plan to take in response to the report and its findings.

The report rightly highlights the important role that internal audit can play in helping companies to promote a positive corporate culture. The Financial Reporting Council (FRC) strengthened the UK Corporate Governance Code in 2018 to provide for company boards to assess and monitor culture, to ensure a link between culture, purpose, values and strategy, and to report on this annually. The FRC’s latest annual review of corporate governance reporting, published in November 2021, found some progress in how companies report on their culture.

Additionally, the Government has set out proposals to give the FRC’s planned successor body – the Audit, Reporting and Governance Authority – new powers to hold large companies to account for the quality and usefulness of their corporate reporting, including reporting on culture. These proposals were set out in the White Paper on ‘Restoring Trust in Audit and Corporate Governance’ in 2021. The Government will be responding to that consultation in due course.