Finance Sector Code of Corporate Governance (Amended February 2026)

Summary

This is the GFSC's Finance Sector Code of Corporate Governance, as amended in February 2026 (effective 1 February 2026). The amendment widens the existing climate change provisions into broader environmental sustainability risk provisions (new wording in Principle 5.2.1 and Appendix 3 Principle A:18). The Code is a non-prescriptive framework of 8 Principles with supporting Guidance against which Boards, shareholders and the GFSC can assess governance quality; non-compliance does not automatically trigger sanctions, but firms must be able to discuss their governance practices with the GFSC.

• Who it applies to: All companies licensed by the GFSC under: the Protection of Investors Law 2020 (funds), Banking Supervision Law 2020, Regulation of Fiduciaries, Administration Businesses and Company Directors Law 2020, Insurance Managers and Insurance Intermediaries Law 2002, and the Lending, Credit and Finance Law 2022. Insurers licensed under the Insurance Business Law 2002 are subject only to Appendix 3.
• Who is excluded: Guernsey branches of foreign-domiciled companies, partnerships, and underlying SPVs or investment holding companies of funds. Companies reporting against the UK Corporate Governance Code or the AIC Code of Corporate Governance are deemed to meet this Code.
• Core Principles: The Board; Directors; Business Conduct and Ethics; Accountability; Risk Management; Disclosure and Reporting; Remuneration; Shareholder Relations, each with supporting Level 2 Guidance.
• February 2026 change: Principle 5.2.1 (Board principles) and Appendix 3 Principle A:18 (insurers) are broadened from climate change risk alone to cover wider 'environmental sustainability risks', including climate change and biodiversity risks, and their impact on business strategy and risk profile.

Companies are expected to self-assess against the Principles, discuss the Code periodically at Board level with minuted outcomes, and provide the GFSC with an assurance statement confirming directors have considered the effectiveness of their governance practices and their degree of compliance with the Principles.

Key obligations

• Boards must maintain a governance structure appropriate to the nature, scale and complexity of the business (Principle 1.1)
• Directors must declare actual or potential conflicts of interest and deal with them in accordance with the company's constitutional documents (Principle 3.2)
• Boards must maintain a sound system of internal control and regularly review it (Principle 4.4)
• Boards must undertake, at least annually, a review of the company's business activities and future prospects (Principle 4.8)
• Boards must consider the impact of relevant environmental sustainability risks, including climate change and biodiversity risks, on business strategy and risk profile, and make timely disclosures where appropriate (Principle 5.2.1)
• Boards must undertake, at least annually, a review of the effectiveness of the company's risk management, policies, procedures and controls (Principle 5.3)
• Boards must review business continuity and contingency plans at least annually (Principle 5.4)
• The Board must ensure all statutory and regulatory reporting deadlines are met (Principle 6.1)
• Companies must prepare a self-assessment against the Code, reflecting the nature, scale and complexity of the licensee, and consider it periodically at a minuted Board meeting
• Companies must be prepared to provide the GFSC with an assurance statement confirming directors' consideration of the effectiveness of their corporate governance and compliance with the Principles
• Licensed insurers' Boards must carry out an annual review of the effectiveness of corporate governance and internal controls (Appendix 3, Principle A:17)
• Licensed insurers' Boards must consider environmental sustainability risks, including climate change and biodiversity risks, on business strategy and risk profile and make timely disclosures where appropriate (Appendix 3, Principle A:18)

Applies to

banks, funds (collective investment schemes), fiduciaries, administration businesses and company directors, licensed insurers, insurance managers and insurance intermediaries, lenders and credit/finance licensees

Deadlines

• 1 February 2026: Effective date of the February 2026 amendment widening climate-change provisions to environmental sustainability risks
• financial years starting from 1 October 2021: Date from which Principle 5.2.1 and Appendix 3 Principle A:18 (environmental/climate risk principles) were introduced and apply
• 1 January 2012: Original effective date of the Code
• at least annually: Recurring requirement for Board review of business activities, risk management effectiveness, and business continuity/contingency plans