61% of FTSE 350 Boards Skip External Board Reviews in 2026

UK Corporate Governance Code Provision 21 requires FTSE 350 chairs to commission an externally facilitated board performance review at least every three years — and most boards are falling short.

The Financial Reporting Council (FRC) strengthened this requirement in the 2024 Code, replacing the old “consider having” language with a firm expectation that chairs “commission” external facilitation. It applies on a comply-or-explain basis to financial years beginning on or after 1 January 2025, which means most FTSE 350 boards are now in their second reporting cycle under the tougher standard. Compliance data suggests the message hasn’t landed.

What Does Provision 21 Actually Require Boards to Do?

Provision 21 sits in Section 3 of the Code, which the FRC deliberately renamed from “board evaluation” to “board performance review” to signal a continuous improvement process rather than a one-off compliance exercise. The chair must commission a regular externally facilitated review of the board, its committees, the chair personally, and individual directors, at minimum every three years for FTSE 350 companies. Provision 22 then requires the chair to act on the findings — addressing weaknesses and confirming directors respond to development needs. Provision 23 requires the annual report to explain how the review was conducted, what it found, and how it will shape future board composition.

Executive Action:

• Confirm your last externally facilitated review date and calculate whether you’re inside the three-year window.
• Distinguish Provision 21 (performance review) from Provision 29 (internal controls declaration) — they are separate obligations with separate disclosure requirements.
• Brief the Nomination Committee now if a review is due within the next reporting cycle.

Why Are FTSE 350 Boards Falling Behind on External Reviews?

According to the Spencer Stuart UK Board Index 2025, only 39% of the largest 150 FTSE companies commissioned an externally facilitated board review in 2025 — down from 46% in 2020, moving in the opposite direction from where a strengthened Code provision should be pushing it. According to a 2024 survey of 200 UK board members by BDO and Norman Broadbent, 42% of boards had not held an external review since the pandemic. The gap is partly cost, partly scheduling around AGM cycles, and partly a lingering perception — one the FRC’s own renaming tried to correct — that external review is a backward-looking audit rather than a forward-looking improvement tool.

Executive Action:

• Ask your Company Secretary for a written compliance position on Provision 21 before the next board meeting.
• Budget for external facilitation now rather than as a year-end scramble — costs and reviewer availability both rise closer to reporting deadlines.
• If your last review predates 2023, treat it as overdue regardless of the strict three-year math.

How Should Chairs Commission an Externally Facilitated Review?

The Code requires the reviewer to have no other connection with the company — a genuine independence test, not a box-ticking one. Chairs should run a short tender among two or three specialist providers, agree scope (board, committees, chair, individual directors) upfront, and set a timeline that lands findings before the annual report drafting cycle begins. The review should cover board composition and succession planning, information flow and papers quality, committee effectiveness, and how the board actually spends its time relative to strategic priorities. A rushed review commissioned to hit a compliance deadline produces generic findings that add no value and invite investor scrutiny at the AGM.

Executive Action:

• Shortlist reviewers with no prior advisory, audit, or recruitment relationship with the company or its directors.
• Set review scope and timeline at least six months before annual report sign-off.
• Use our executive self-assessment tools to benchmark board readiness ahead of commissioning an external reviewer.

What Should the Annual Report Disclose About the Review?

Provision 23 disclosure is where many boards under-deliver even after doing the review properly. The annual report must explain how the review was conducted, its key findings, actions taken or planned in response, and how it has influenced or will influence board composition. Where the review was externally facilitated, the report must name the reviewer and confirm they have no other connection to the company. Generic disclosure — “the board conducted a review and found it operates effectively” — no longer satisfies investors or proxy advisers who now benchmark disclosure quality year-on-year. This connects directly to the internal controls declaration under Provision 29, which sits in the same Code section and draws on similar evidence trails.

Executive Action:

• Draft the Provision 23 disclosure alongside the review itself, not after, so findings and actions stay specific.
• Name the reviewer and confirm independence explicitly in the annual report text.
• Link disclosed actions to measurable board composition or process changes, not aspirations.

What Happens If a Board Doesn’t Comply?

Provision 21 operates on a comply-or-explain basis, so there’s no direct FCA or FRC fine for missing the three-year window. The real exposure is reputational and investor-facing: proxy advisers such as Glass Lewis and ISS flag weak board evaluation disclosure in their voting recommendations, and institutional shareholders increasingly treat it as a proxy for wider governance discipline. A board that can’t produce a credible explanation for skipping external facilitation invites the same scrutiny as one filing a hollow Corporate Governance Code statement more broadly, and it compounds director-level accountability questions already being asked under wider reforms — see our briefing on director personal liability.

Executive Action:

• Prepare a clear, specific “explain” statement now if a review is genuinely not due or not yet complete.
• Brief the Chair and Senior Independent Director jointly — this is a shared accountability, not solely a Company Secretary task.
• Review our technology strategy review template if the board’s last evaluation flagged digital oversight as a weakness.

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