How will board governance change over the next five years?

Over the next five years, UK boards will be asked to show how they reached their decisions. The FRC moved first. Provision 29 of the UK Corporate Governance Code 2024 applies to financial years beginning on or after 1 January 2026, so a board with a December year end has been building its evidence since January and will publish its first declaration in the 2027 annual report.

Artificial intelligence (AI) will become a regular agenda item over the same period, and directors will see live figures alongside their papers. Directors keep responsibility for steering the organisation and supervising management throughout.

Provision 29 is the one change with a fixed start. The others will arrive as fast as each organisation adopts AI and live reporting, so their pace will vary from board to board.

The Code applies to listed companies, so directors of private, mutual and charity boards have no declaration to make. The questions about AI, information and minutes still apply to them.

Company secretaries and chairs carry most of this work, because the company secretary keeps the records and the chair sets the agenda. The final section lists what they and their non-executive directors (NEDs) can do in the next 12 months, and when.

Three parties now want evidence of how the board reached its decisions, and their questions point the same way.

The FRC asks most specifically. Provision 29 commits the board to a published view on whether its material controls were effective, so the board has to show the basis for that view.

Directors ask the second set of questions, and they ask management. A retailer that uses AI to set prices, or a lender that uses it to approve loans, has put a model inside a control the board is responsible for monitoring. Directors need to know the model exists and which executive answers for it.

Shareholders ask the third. They read governance reports before voting on the re-election of directors, and the Code asks companies to report on the outcomes of their governance rather than the arrangements behind it.

Provision 29 asks the board to declare whether the company's material controls were operating effectively at the balance sheet date. Where any were not, the board describes them, says what it has done or plans to do about them, and reports progress on anything it disclosed previously.

Material controls cover financial, operational, reporting and compliance activity. That scope is wider than a financial reporting exercise, and it's the part boards most often underestimate.

The monitoring itself isn't new. Boards already had to monitor the risk management and internal control framework and review its effectiveness at least annually. Provision 29 adds the published declaration, which commits the board collectively to a view. Management continues to design and operate the controls, and the audit committee usually does the detailed monitoring on the board's behalf.

The UK government considered a regime modelled on the US Sarbanes-Oxley Act and decided against it, asking the FRC to add internal control reporting to the existing Code instead. Sarah Rapson explained the aim when she spoke to Board Intelligence during the FRC's consultation:

Most of the evidence already exists in management papers and minutes. A paper on internal controls should say which controls internal audit or the control owners tested, and what they found. Where a paper omits that, a NED should ask for it, and the company secretary should record the exchange.

How the company secretary writes that exchange up decides whether it counts as evidence.

Weak: "The board noted the internal controls report."

Stronger: "The board discussed the internal controls report. [NED] asked whether the Q2 reconciliation failure had recurred. The CFO confirmed it had not and said internal audit rechecked the control in September. Action: CFO to report the remediation outcome to the audit committee in December."

The first version is worthless as evidence. It records no question, so the board has nothing to show when a shareholder or the FRC asks how it reached its view. The second records the question, the answer, and who owns the next step.

Boards should oversee AI the way they oversee cybersecurity. Once AI sits inside a material control, the board should review it at regular meetings through the year, with a named executive accountable for each use.

Directors have started this work. In Board Intelligence's Summer 2026 Board Value Index, 49% of directors globally said their board is actively reviewing which decisions should remain human-led as AI becomes more capable. UK directors trail at 42%, against 58% in the Middle East.

Fewer boards have the arrangements to support that review. Board Intelligence's Board AI Readiness Radar, based on submissions from 47 organisations across 17 countries in May 2026, found that 11% of boards meet a relatively conservative threshold for AI readiness, with the average organisation scoring 10.3 out of 30. The two widest gaps are infrastructure, where roles, responsibilities and risk frameworks have not changed to reflect AI, and information, where boards are not getting what they need to oversee AI-related decisions.

The simplest format is a short standing report from the accountable executive, covering:

• AI uses added or changed since the last meeting
• incidents, including errors the business caught and how it corrected them
• any change in who is accountable for each use
• decisions the board needs to take

Directors then question the report as they would any other risk paper. The chair decides how often it comes up, which should be more often than the annual deep dive it replaces.

Directors will still read papers in advance, and they will also see live figures and have to interpret them in the meeting.

Where management runs the business off daily dashboards, the board will start to see some of those numbers, in the pack and on screen. A director with a paper that arrived on Friday has the weekend to prepare questions. A director looking at a number that moved this morning has to decide on the spot whether it matters.

Gavin Patterson made the same point when he spoke to Board Intelligence:

The chair can make this manageable with one decision. Agreeing a short list of measures the board sees live, with the CFO, leaves everything else in the pack. Directors then know which numbers they are expected to read in the room.

Live figures can also save time. Where directors have already seen the numbers, nobody needs to present them again, and the chair can give that time to strategy.

Boards will need directors who understand AI and internal controls well enough to judge whether management's explanations are complete. Nominations committees have kept skills matrices for years, and a single briefing won't close these particular gaps, because the questions are technical. A director who doesn't understand how a credit model reaches its decisions can't tell whether management's account of its failure is accurate.

Boards can recruit for the gap when a seat comes up, or train the directors they already have. Most will need both, because a seat might not come up for 3 years and the question could be on next quarter's agenda.

Directors' legal duties under the Companies Act 2006 stay as they are. So does the split between management, which runs the business, and the board, which steers and supervises it. More data gives directors more to question, and management still makes the operating decisions.

Boards will meet about as often as they do now, and good decisions will still come from directors who have read the papers and are prepared to disagree in the meeting.

Each action has a suggested point in the board year, so it can go into the forward plan now.

For the chair

• At your next board meeting, make AI a recurring agenda item, with a named executive owner and a short standing report.
• At your next meeting with the CFO, agree which measures the board will see live.
• Before the year end, agree a date with the audit committee chair to review the evidence behind your first Provision 29 declaration.
• Before the next appointment, ask the nominations committee to check the skills matrix against AI oversight and internal controls, and use board development programmes for any gap a new hire won't close in time.

For non-executive directors

• Before each meeting, pick one material control or one AI use and ask management who last checked it and what they found.
• When you read each pack, compare at least one assumption with what earlier packs said. Doing that by hand means searching years of papers. Board Intelligence's IQ Experts can recall any pack you're permitted to see, from inside the portal, and you decide what the findings mean.

For the company secretary

• This quarter, agree a minuting format with the chair for discussions of controls and AI, using the stronger minute above as a starting point.
• Before the year end, list the papers that will support the declaration and when each needs to reach the board.
• From the next meeting, keep an index linking each material control to the minutes where the board discussed it.

Over the next five years, the regulator and investors will ask boards for a clear record of how they reached their views. The company secretary already keeps that record in the minutes and papers, so expect directors to read their own minutes much more closely.