Material controls as strategic signals: What your list really says about your organisation
Boards are now required to declare whether their material controls were effective at the balance sheet date, as the updated UK Corporate Governance Code brings Provision 29 into effect for financial years beginning on or after 1 January 2026. The Code continues to operate on a comply or explain basis, but expectations have strengthened around clarity, evidence and accountability.
This makes materiality more important than many first assumed. Deciding which controls are material is not simply a technical requirement. It is a visible statement about how the organisation understands risk, performance and long‑term resilience. It also provides a rare opportunity for boards to shape how their priorities are interpreted by investors and other stakeholders.
In other words, your material controls list is not just a requirement. It is a signal.
Material controls reflect the organisation’s priorities
Provision 29 places responsibility on the board to determine what is material, guided by strategic risks, stakeholder impact and sustainability. That judgement reveals a great deal.
A clear, well‑defined set of material controls shows that the board knows what drives the business and which risks matter most. It contributes to a narrative of discipline and alignment between strategy, governance and execution. When the list is coherent and focused, stakeholders can clearly see how leadership is directing attention. That clarity builds confidence.
A focused list sends a stronger message
The Code requires boards to cover financial, operational, reporting and compliance controls, but it does not require every control to be elevated to material status. A concise list communicates that the organisation understands its priorities and has made thoughtful decisions. It shows that the board has concentrated on the controls that genuinely influence outcomes rather than creating unnecessary noise.
The goal is not to capture everything. It is to highlight the controls that truly shape the organisation’s performance and risk exposure. A selective list shows confidence and maturity. A very broad list can unintentionally suggest a lack of clarity about what matters most.
Material controls should align with the future, not just the past
Many organisations have control frameworks shaped by historic reporting needs, but the updated Code broadens expectations across all types of controls.
Boards can use this as an opportunity to bring materiality in line with where the business is going:
- Strategic risks that are evolving
- Processes that underpin customer experience or revenue
- Areas where regulatory expectations are increasing
- Operational dependencies that influence resilience
A material list aligned to today’s environment demonstrates that governance thinking is keeping pace with the organisation’s ambitions and operating reality.
The boardroom conversation shapes the quality of the list
High‑quality materiality decisions are rarely produced by templates. They come from board discussions that explore judgement, perspective and risk tolerance.
The most effective boards look at materiality through a strategic lens. They ask whether the draft list reflects the organisation’s direction, whether the controls chosen offer real insight and whether the set is coherent when read alongside strategy and principal risks.
These discussions help ensure that the final list is balanced, defensible and aligned.
Investors will look for alignment
Provision 29 requires boards to describe how they monitored and reviewed the framework, declare whether material controls were effective and disclose actions taken when controls were not.
This gives investors a clearer view of how governance, strategy and organisational performance fit together.
They will look for consistency between:
- Strategic objectives
- Principal risks
- The selected material controls
- The evidence supporting the declaration
- The quality of action taken where issues are identified
When these elements line up, the organisation presents a cohesive and credible picture. When they do not, confidence can slip.
Material controls now form part of the organisation’s governance identity
The introduction of Provision 29 has elevated materiality from a background process to a visible governance decision. The controls you highlight say something about how you lead, how you think about long‑term success — including the ROI of stronger internal controls explored in this blog post — and how well your governance approach reflects the organisation’s reality.
A well‑considered material list helps tell a clear story: It shows that governance is connected to strategy, risk and sustainable performance. Used well, materiality becomes more than a requirement. It becomes a strength.
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Keep exploring
The UK Corporate Governance Code: Key provisions and updates
Gain a better understanding of the UK Corporate Governance Code. Discover what it is and how your organisation can comply for more effective governance.
Provision 29: A practical guide to board declarations on internal controls
Learn what Provision 29 requires from boards, how to define material controls, and how to produce a clear, evidence‑based declaration that supports investor confidence.
Maximising ROI: The business case for improving internal controls
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