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Introduction: A New Era of Corporate Accountability
For years, many organisations treated internal controls as something that could be reviewed, documented and presented when auditors, regulators or board members asked for evidence. The paperwork could look impressive, the policies could be perfectly written, and the control framework could appear mature — yet none of that necessarily proved that the controls were working effectively in the real world.
That mindset is becoming increasingly difficult to defend.
The revised UK Corporate Governance Code 2024, published by the Financial Reporting Council (FRC), introduces a significant change through Provision 29. The provision applies to financial years beginning on or after 1 January 2026 and requires boards to make a declaration concerning the effectiveness of their material internal controls.
FRC (Financial Reporting Council)
+1
The change is important because it shifts the conversation from “Do we have controls?” to a much harder question: “Can we prove that our most important controls are actually working?”
That distinction matters enormously in an environment where businesses depend on cloud platforms, third-party suppliers, complex IT infrastructures, automated systems, cybersecurity controls and increasingly sophisticated digital operations.
Provision 29 therefore should not be viewed simply as another governance requirement. It is a signal that boards are expected to develop a much clearer understanding of how risk is controlled throughout the organisation — and whether that control environment remains effective as the business changes.
Provision 29 Changes the Conversation
Under Provision 29, boards must monitor the
FRC Media
The important word here is material.
The FRC has deliberately avoided prescribing a universal number of controls that every company must classify as material. Instead, material controls are expected to be determined by each board according to factors such as the organisation’s size, business model, complexity, operations, structure and risk profile.
FRC (Financial Reporting Council)
+1
That flexibility makes sense. A multinational financial institution and a technology company operating primarily through cloud infrastructure will not have identical control environments.
But flexibility does not eliminate accountability.
Boards still need sufficient evidence to support their conclusions.
From Policies to Proof
The biggest cultural change may be the movement away from compliance as documentation toward compliance as evidence.
A company can have an access-control policy, for example, but the existence of that policy does not prove that privileged accounts are being reviewed properly.
A company can have a backup policy, but that does not prove that backups are completing successfully and can actually be restored.
A company can have a vulnerability-management procedure, but that does not prove that critical vulnerabilities are being identified and remediated within the organisation’s required timeframe.
A company can have a third-party risk policy, but that does not prove that suppliers continue to meet the organisation’s security requirements after contracts are signed.
This is where continuous visibility becomes increasingly valuable.
The board does not merely need a collection of documents. It needs confidence that the information presented to it reflects the organisation’s actual risk and control environment.
Why Annual Testing Is Becoming Insufficient
The traditional annual assessment model has an obvious weakness: businesses do not stand still for twelve months.
Cloud environments change.
Employees join and leave.
Applications are deployed.
Infrastructure is replaced.
Suppliers change.
Software vulnerabilities emerge.
Permissions accumulate.
Regulatory obligations evolve.
New cyber threats appear.
A control that worked perfectly in January may no longer be effective in September.
The original article compares this situation with an annual vehicle inspection, and the comparison is particularly useful. An inspection tells you what condition the vehicle is in at the moment it is examined. It does not guarantee that the vehicle will remain problem-free for the rest of the year.
The same principle applies to cybersecurity and internal controls.
An annual review remains an important governance requirement, but organisations operating complex digital environments increasingly need continuous monitoring between formal review points.
The False Comfort of a Snapshot
One of the greatest dangers facing boards is the false sense of security created by outdated information.
Imagine that a security team extracts a report showing that 98% of privileged accounts comply with policy.
That sounds reassuring.
But what happened after the report was generated?
Were five new administrators added?
Did a contractor receive elevated privileges?
Did an employee leave without having their account disabled?
Did a cloud administrator accidentally create a highly privileged service account?
Did an automated process introduce an exception?
The original 98% figure may still be sitting inside a board presentation while the underlying environment has already changed.
This is why evidence has to be treated as a living source of information rather than a static document.
Material Controls Are the Real Priority
Provision 29 does not require boards to produce an enormous catalogue containing every control in the organisation.
The FRC specifically states that boards do not have to make declarations over all internal controls. The focus is on controls considered material to the organisation.
FRC (Financial Reporting Council)
That is an important distinction.
The goal should not be to overwhelm directors with thousands of technical indicators.
Instead, organisations need to identify the controls that protect the business against its most consequential risks.
These could include:
Privileged-access management.
Financial reporting controls.
Identity and authentication controls.
Cybersecurity monitoring.
Data protection controls.
Backup and recovery controls.
Vulnerability management.
Change management.
Regulatory compliance controls.
Third-party and supplier controls.
Business continuity controls.
Cloud security controls.
Incident-response controls.
The exact list will differ from one organisation to another.
The
Security Teams Are Now Part of the Boardroom Evidence Chain
Provision 29 may appear to be primarily a governance issue, but its consequences extend deeply into IT and cybersecurity departments.
Security teams increasingly become the source of evidence used to demonstrate that important controls are operating effectively.
That means cybersecurity metrics can no longer exist solely inside security dashboards.
A board may need to understand whether identity controls are effective, whether security vulnerabilities remain unresolved, whether critical systems are protected, whether incident-response capabilities are functioning and whether suppliers continue to meet required security standards.
The challenge is translating technical information into business-level evidence.
A board generally does not need thousands of vulnerability records.
It needs to understand whether the vulnerabilities that matter most to the company’s critical risks are being managed effectively.
The Problem With Siloed Reporting
Many organisations still operate with disconnected reporting systems.
Security produces one report.
Internal audit produces another.
Risk management maintains its own assessment.
Compliance teams operate another framework.
IT maintains technical dashboards.
Finance has separate controls reporting.
The result can be five different versions of reality.
One report might describe a risk as low.
Another might call it medium.
A third might show that a related control has failed.
A fourth might contain information that is already several weeks old.
The board then has to reconcile the information manually.
That is not simply inefficient. It can create governance risk.
Shared Evidence Creates Stronger Governance
A unified reporting architecture can help bridge this gap.
Instead of treating security, compliance, internal audit and risk as independent reporting functions, organisations can connect their evidence around common risks and controls.
That creates a more coherent picture.
A failed control can be linked to the risk it is intended to mitigate.
The duration of the failure can be measured.
The affected systems can be identified.
The responsible owner can be established.
The remediation process can be tracked.
And, critically, the board can see whether the issue has actually been resolved.
This is much more powerful than simply reporting that a control received a passing score during an annual assessment.
Continuous Assurance Is About Context
Continuous assurance does not mean that every employee needs to stare at a dashboard every second of the day.
It means organisations should have mechanisms capable of identifying meaningful changes in their control environment.
Consider privileged access.
If an administrator account suddenly receives additional permissions, a continuous control-monitoring system could detect the change.
If a critical security control becomes disabled, that event can be recorded.
If a required security configuration drifts away from policy, the organisation can identify the deviation.
If a previously compliant supplier becomes non-compliant, the change can trigger investigation.
The value is not simply detecting that something went wrong.
The real value comes from understanding what changed, when it changed, how long the exposure existed and what happened afterward.
Deep Analysis: Turning Continuous Assurance Into Technical Evidence
For organisations attempting to operationalise this approach, the technical foundation should begin with identifying the controls that matter most to the business.
A useful first step is to inventory critical systems and services:
Linux: identify listening network services sudo ss -tulpn
Identify enabled services
systemctl list-unit-files --state=enabled
Review recent authentication activity
sudo lastlog
These commands are simple, but they illustrate an important principle: control effectiveness should ultimately connect to observable evidence.
For vulnerability management, teams can periodically identify known weaknesses across managed systems:
Example: inspect installed packages on Debian/Ubuntu dpkg-query -W
Review pending security updates
apt list --upgradable
For Windows environments, administrators can use PowerShell to inspect security-relevant configuration:
List local administrators Get-LocalGroupMember -Group "Administrators"
Review Windows services
Get-Service
Inspect recent security events
Get-WinEvent -LogName Security -MaxEvents 50
Cloud environments require an even stronger approach because configuration can change rapidly.
A basic AWS CLI example might look like:
Review IAM users aws iam list-users
Review IAM roles
aws iam list-roles
Review CloudTrail configuration
aws cloudtrail describe-trails
The commands themselves are not the solution.
The deeper objective is to turn these observations into repeatable control evidence.
For example:
Control:
Privileged accounts must be reviewed regularly.
Evidence:
Current privileged-account inventory.
Expected state:
Every privileged account has an approved owner.
Exception:
Account without documented ownership.
Risk:
Unauthorised or excessive privileged access.
Owner:
Identity and Access Management Team.
Remediation:
Review, approve or remove access.
Status:
Open / In Progress / Resolved.
That structure is far more useful than simply writing “privileged access controls are effective.”
The organisation can now demonstrate why it reached that conclusion.
Automation Can Reduce Human Reporting Errors
Manual evidence collection is another major weakness in traditional control assessment.
Humans copy information.
Humans paste spreadsheets.
Humans reconcile reports.
Humans forget to update dashboards.
Humans make mistakes.
Automation can reduce some of these risks by connecting control requirements directly to operational data.
A simplified control-monitoring workflow could look like this:
Business Risk
↓
Material Control
↓
Control Requirement
↓
Automated Evidence
↓
Exception Detection
↓
Risk Assessment
↓
Remediation
↓
Board-Level Reporting
This model creates a much stronger relationship between governance and technology.
The board does not need to understand every technical mechanism.
It needs confidence that the evidence underneath the declaration is reliable.
Control Failures Should Become Learning Opportunities
A mature organisation should not interpret every control failure as a governance disaster.
Controls will fail.
Systems will change.
People will make mistakes.
Third parties will experience incidents.
The more important question is whether the organisation detects failures quickly and responds effectively.
Provision 29 specifically requires reporting on material controls that have not operated effectively at the balance sheet date, including actions taken or proposed to improve them.
FRC Media
That creates an opportunity to move beyond superficial compliance.
Instead of hiding weaknesses, organisations can demonstrate that they understand them.
A transparent control environment can actually increase confidence because it shows that management understands where the risks are and what is being done about them.
The Board Needs More Than a Green Dashboard
A green status indicator can be comforting.
It can also be dangerously misleading.
Boards should ask:
What evidence supports this green status?
How recent is the evidence?
What exceptions exist?
How long have they existed?
Who owns them?
What changed since the last review?
Which assumptions are we relying upon?
What happens if this control fails?
These questions turn governance reporting from a presentation exercise into a genuine risk conversation.
Continuous Assurance Is Not the Same as Continuous Compliance
There is also an important distinction between monitoring controls continuously and attempting to comply with every conceivable requirement continuously.
The objective is not to generate endless alerts.
It is to focus attention on material risks and meaningful control changes.
An organisation that generates 100,000 alerts every month has not necessarily achieved better assurance.
It may simply have created a larger workload.
Effective continuous assurance should therefore be risk-based, proportionate and contextual.
That aligns with the
FRC (Financial Reporting Council)
The Human Element Still Matters
Technology cannot replace governance judgment.
A dashboard cannot determine whether a risk is acceptable.
Automation cannot understand every business consequence.
A control can technically pass while the underlying business process remains vulnerable.
This is why Provision 29 ultimately remains a board responsibility.
The FRC makes clear that boards must make their own assessment of effectiveness using evidence obtained through monitoring and review of the risk management and internal control framework.
FRC (Financial Reporting Council)
Technology can strengthen the evidence.
It cannot eliminate accountability.
What Changes for CISOs and Security Leaders?
For CISOs, security directors and technology leaders, Provision 29 creates an opportunity to elevate cybersecurity discussions.
Instead of presenting boards with technical statistics, security leaders can connect security controls directly to business risk.
For example:
Technical metric: 94% of critical vulnerabilities remediated.
Better governance question: Which material business services remain exposed to critical vulnerabilities, for how long, and what compensating controls exist?
That second question is much closer to what a board needs to understand.
The same principle applies to identity, cloud security, ransomware resilience, endpoint protection, data security and third-party risk.
The Rise of Evidence-Based Cyber Governance
Cybersecurity governance is gradually moving toward a model where claims require evidence.
Saying “we have strong security controls” is no longer particularly useful.
Showing that:
controls are defined,
ownership is established,
evidence is collected,
exceptions are detected,
failures are tracked,
remediation is documented,
historical trends are available,
and material risks are reported
is considerably stronger.
This is the direction in which modern governance is moving.
Provision 29 Could Become a Competitive Advantage
Regulation is often perceived as a burden.
But organisations that build better control visibility may discover a commercial advantage.
A company that understands its operational risks can make faster decisions.
A company that understands its technology dependencies can respond more effectively to incidents.
A company that can demonstrate mature governance can potentially build greater trust with investors, customers and partners.
The strongest organisations may therefore stop thinking about Provision 29 as something they merely need to survive.
They will use it to improve how the business operates.
What Boards Should Be Asking Now
The most important questions are surprisingly straightforward.
Which controls have we classified as material?
Why are they material?
Who owns each control?
What evidence proves that each control is effective?
How frequently is that evidence refreshed?
How are exceptions identified?
How long do control failures remain unresolved?
Can we reconstruct what happened during the year?
What information reaches the board when a material control deteriorates?
Would we be confident defending our declaration to investors and regulators?
If those questions are difficult to answer, the organisation may have a documentation problem disguised as a governance programme.
What Undercode Say:
The Real Change Is Cultural
Provision 29 is more important than it initially appears because it encourages a change in corporate culture.
Boards can no longer rely entirely on annual compliance rituals.
They need evidence.
Cybersecurity Has Entered the Governance Core
Cybersecurity is increasingly inseparable from operational resilience, financial reporting and corporate governance.
A security failure can become an operational failure.
An operational failure can become a financial event.
A financial event can become a governance crisis.
The Spreadsheet Era Is Ending
Spreadsheets will not disappear overnight.
But relying on manually reconciled spreadsheets as the primary source of control assurance is becoming increasingly difficult to defend.
Modern organisations need connected evidence.
Continuous Monitoring Makes Better Decisions Possible
The greatest value of continuous assurance is not the dashboard.
It is the ability to make decisions using current information.
That can dramatically improve risk management.
Boards Need Trends, Not Just Snapshots
A single status report tells directors where something stands today.
A historical trend can show whether the organisation is improving or deteriorating.
That difference matters.
Control Failure Duration Is a Critical Metric
Knowing that a control failed is useful.
Knowing that it failed for three hours, three days or three months is far more useful.
Exposure duration provides context.
Materiality Must Be Business-Driven
Organisations should not select material controls simply because they are easy to measure.
The controls should correspond to the risks capable of causing serious consequences.
Security Metrics Need Business Context
A board does not necessarily need to know how many firewall rules exist.
It needs to understand whether critical systems remain exposed to material threats.
Automation Should Support Governance
Automation can collect evidence, detect changes and identify exceptions.
But management still needs to interpret the information.
Good Governance Is About Confidence
The purpose of Provision 29 should ultimately be to increase confidence.
Not artificial confidence.
Evidence-based confidence.
The Best Control Is Not Always the Most Complicated
A highly sophisticated control that nobody monitors effectively can be weaker than a simple control with clear ownership and continuous verification.
Third Parties Cannot Be Ignored
A company’s control environment increasingly extends beyond its own infrastructure.
Cloud providers, software vendors, managed service providers and other suppliers can materially affect risk.
Cloud Environments Make Static Assurance Harder
Cloud infrastructure can change in minutes.
Governance models therefore need to accommodate environments that evolve continuously.
Identity Is One of the Most Important Control Areas
Privileged access is especially important because compromised administrative accounts can turn a small security incident into an enterprise-wide crisis.
Vulnerability Management Is Another Obvious Example
A vulnerability report generated months ago does not prove that current exposure is under control.
The environment changes constantly.
Control Owners Must Be Clearly Defined
Every material control should have accountability.
If nobody owns a control, nobody truly owns its failure.
Exceptions Are Valuable Information
Exceptions should not automatically be treated as embarrassing failures.
They can reveal weaknesses that management needs to understand.
Remediation Evidence Matters
Saying that an issue was fixed is weaker than demonstrating when it was fixed, who fixed it and how effectiveness was verified.
Continuous Assurance Can Improve Audit Readiness
Organisations that continuously collect evidence should find it easier to reconstruct their control environment during formal reviews.
It Can Also Reduce Reporting Friction
When data already exists in connected systems, teams spend less time chasing screenshots and manually reconciling reports.
Risk and Compliance Teams Need Shared Data
Different departments should not be working from contradictory versions of the same risk.
Internal Audit Can Benefit Too
Continuous evidence can help internal audit identify where deeper investigation is actually necessary.
Boards Should Challenge Green Ratings
A green indicator without supporting evidence is simply an assertion.
The Question Is “Why?”
Why is the control effective?
Why was it considered material?
Why did an exception occur?
Why was remediation sufficient?
Those questions produce better governance.
Annual Reviews Still Matter
Provision 29 does not eliminate the annual review requirement.
The stronger approach is to make the annual review the culmination of ongoing monitoring rather than the beginning of a frantic evidence-gathering exercise.
Continuous Assurance Does Not Mean Constant Human Intervention
Automation should identify meaningful deviations so people can focus on decisions.
Too Many Alerts Can Become Another Risk
A badly designed monitoring programme can bury teams in noise.
Materiality and risk prioritisation are therefore essential.
Boards Should Understand Their Blind Spots
The most dangerous risks are often the ones an organisation does not know it cannot see.
Control Drift Deserves Attention
Controls can gradually become less effective as infrastructure, applications, employees and suppliers change.
Security Teams Should Measure Exposure
Counting controls is less valuable than understanding what could happen if important controls fail.
Governance and Cybersecurity Are Converging
The modern CISO increasingly operates at the intersection of technology, risk, regulation and business strategy.
Evidence Quality Will Matter More
Reliable, timely and traceable evidence is becoming a fundamental part of modern governance.
Transparency Can Strengthen Trust
A company that openly identifies weaknesses and explains remediation may demonstrate stronger governance than one that simply reports a perfect-looking control environment.
The Biggest Risk Is False Assurance
The most dangerous situation is not necessarily knowing that a control failed.
It is believing that everything works when nobody has enough evidence to prove it.
Provision 29 Encourages Better Questions
Ultimately, the provision forces organisations to ask whether their governance claims are supported by reality.
It Is a Technology Challenge Too
Security, IT and data teams will increasingly need to provide the evidence supporting governance decisions.
But It Is Ultimately a Leadership Challenge
Technology can collect information.
Boards must decide what that information means.
The Strongest Organisations Will Adapt Early
Companies that build continuous assurance capabilities before reporting pressure peaks will likely find the transition easier.
Compliance Can Become Resilience
The biggest opportunity is to stop treating regulatory requirements as isolated obligations.
A well-designed control environment can improve security, resilience and decision-making simultaneously.
The Future Is Evidence-Driven
The corporate governance model is moving toward a world where important claims must be supported by current, traceable evidence.
That is a healthy direction.
The Bottom Line
Provision 29 should not be reduced to another paragraph in an annual report.
It represents a broader shift toward continuous, evidence-based corporate governance.
And for organisations operating increasingly digital businesses, that shift may ultimately prove far more valuable than the regulation itself.
✅ Provision 29 Applies From 1 January 2026
The FRC confirms that the revised Provision 29 applies to financial years beginning on or after 1 January 2026. The wider 2024 Code applies from financial years beginning on or after 1 January 2025.
FRC (Financial Reporting Council)
+1
✅ Boards Must Address Material Controls
The provision covers material controls, including financial, operational, reporting and compliance controls. The board determines what is material based on the company’s circumstances and risk profile.
FRC (Financial Reporting Council)
❌ Provision 29 Does Not Require Continuous Real-Time Monitoring
The original article strongly advocates continuous visibility, but this should not be confused with a direct regulatory requirement for real-time monitoring.
The FRC requires the board to monitor the framework and review its effectiveness at least annually; continuous assurance is better understood as a strong operational approach for generating reliable evidence between formal reviews, rather than a mandatory technical architecture.
FRC (Financial Reporting Council)
+1
❌ Boards Do Not Need External Assurance for Every Control
The FRC does not mandate external assurance over material controls.
Individual boards decide whether external assurance is appropriate and to what extent.
FRC (Financial Reporting Council)
+1
✅ The Annual Report Must Explain the Board’s Assessment
Provision 29 requires the annual report to describe how the board monitored and reviewed the effectiveness of the framework, provide its declaration on material controls at the balance sheet date, and discuss material controls that were not effective at that date and the actions taken or proposed.
FRC Media
✅ The Requirement Is More Than Financial Controls
The revised provision extends beyond traditional financial controls by explicitly covering operational, reporting and compliance controls.
That makes the requirement particularly relevant to modern IT, cybersecurity, cloud and operational-risk environments.
FRC (Financial Reporting Council)
+1
Prediction
(+1) Continuous Assurance Will Become a Strategic Governance Capability
As companies become more dependent on cloud infrastructure, software platforms, automation and third-party services, boards will increasingly demand evidence that remains current between formal reporting cycles.
The organisations most likely to benefit will not necessarily be those with the largest compliance teams. They will be those capable of connecting risk, controls, technical evidence and executive decision-making into one coherent system.
Provision 29 may therefore accelerate a broader transformation in corporate governance: moving from annual snapshots toward continuously informed risk management.
Over time, the distinction between cybersecurity monitoring, operational resilience, compliance assurance and board reporting is likely to become increasingly blurred.
The ultimate winner will be the organisation that can answer one deceptively simple question with confidence:
“Show me the evidence that our most important controls are working — right now.”
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References:
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