We crash into 2024 with a host of governance issues still to reach their conclusion and many at the start of their journey. And with elections on the cards in the UK and US, some could even become central to political campaigns. The coming year will be nothing if not gripping for governance.

So here’s a quick rundown of the issues that may—or may not—transform the boardroom environment, depending on your point of view.

1. UK Corporate Governance Code and internal controls

This month should see the release of a shiny new UK Corporate Governance Code.

It should have captured five years of debate surrounding audit reform. But we know from statements made by the Financial Reporting Council’s new chief executive, Richard Moriarty, that many proposals floated in a draft code published last year have been sunk. Among those were measures to have audit committees report on their monitoring of narrative reporting and sustainability issues.

However, Moriarty said measures aimed at directors reporting on internal controls would remain. This took some senior audit committee chairs by surprise. They believed government was in the mood for reducing the “regulatory burden”.

Indeed, late last year, the government also cancelled plans to have boards report on their risk and resilience preparations and their assurance policies.

But provisions on internal controls remain. In the draft code, it says boards should provide: “A declaration of whether the board can reasonably conclude that the company’s risk management intentional controls systems have been effective throughout the reporting period.”

Boards should also explain how they “monitored and reviewed the effectiveness of these systems” and give a “description” of any “weaknesses or failures” found, as well as the action taken to put things right.

The measures appear to apply to both financial and non-financial measures, meaning a big project each year for internal controls teams and, potentially, internal auditors.

But will these crucial paragraphs remain untouched when the final code is published? Audit committee chairs will be watching closely.

2. Sustainability reporting

This may not be the only reporting change this year. By July, the Department for Business and Trade should decide whether to mandate the use of international sustainability reporting standards, the so-called IFRS S1 and S2, by UK companies.

S1 and S2 are largely based on reporting guidelines from the Taskforce for Climate-related Financial Disclosures (TCFD) launched in 2017. Those using TCFD may find few surprises. But S1 and S2 could become compulsory and full compliance will require plenty of work.

That’s not the end of things. For international companies with operations of the right size inside the EU, new reporting obligations, the Corporate Sustainability Reporting Directive, and—since December—the Corporate Sustainability Due Diligence Directive, which covers disclosures on human rights and sustainability in supply chains, are also now key reporting requirements.

Mandatory assurance will almost certainly follow. Finance departments will need new expertise. Auditors will adapt, too. Over the next two years, sustainability reporting will transform the disclosure landscape.

3. Election fever

This year will see a presidential election in the US and, most likely, a general election in the UK. Corporate governance issues could play a part in both.

ESG governance is likely to appear in Republican campaigning in the US where they claim it is part of the “woke mind disease”. However, that may depend on who Republicans choose to be their presidential candidate. If Donald Trump and comes out on top, and wins the election, the White House might find itself at odds with many large fund managers and companies already pursuing ESG projects.

In the UK, prime minister Rishi Sunak has rowed back on some climate measures, signalling that the Conservatives may also go cold on ESG as an election strategy. too.

On the sidelines will be the question of audit reform. It did not appear in the King’s Speech, the government’s legislative agenda, but Labour has pledged to push ahead with key measures if elected. Would the party put it in their manifesto? It’s not a huge vote winner but it might signal that a Labour government will support rigorous regulation for UK markets.

The ESG debate also raises broader questions. Some academics question whether the concept continues to have legs, not because it fails to capture good intentions, but because the term has become politically toxic, could lead to a “box tick” approach among companies and is somewhat imprecise in any case.

Meanwhile, other academics call for a “paradigm shift” in directors’ duties, as set out in law, to include “sustainability goals”.

Could 2024 be the year that sees attitudes change to ESG, or the disappearance of the term entirely? Will directors’ duties evolve? We’ll wait and see.

4. The London Stock Exchange

What will happen to the London Stock Exchange? This could be the year in which the LSE puts itself back on track—or loses further ground to exchanges around the world.

Much of the answer may be in the LSE’s approach to corporate governance. Last year, the LSE attempted to shift sentiment towards higher pay for CEOs. It also led a lobby group, the Capital Markets Industry Taskforce (CMIT), which published a letter calling for the end of board “explanations” when companies suffered shareholder rebellions of 20% or more.

The LSE and CMIT also successfully lobbied government to ditch new reporting measures on resilience, risk, assurance, fraud and distributable profits.

The reason? The LSE is suffering. In 2007, it reached a high of 3,300 listed companies but was down to around 1,900 at the end of last year. Capital has been moving elsewhere.

Other measures have been taken to boost the LSE. In December, regulators green-lit a move from two categories of listed company—premium and standard—to a single designation.

However, the LSE clearly views governance and its growth as a hindrance to competitiveness. Will the LSE manage to recast governance as a problem in the coming year?

Will non-executives buy into the argument or demand the highest levels of rigour? Towards the end of last year, proxy adviser Minerva claimed that the LSE’s move challenged “accountability and shareholder democracy”. We may be witnessing the emergence of a brand new conflict in UK governance.

5. Artificial intelligence

The next 12 months could be critical in the governance of artificial intelligence. Last November, OpenAI, the company behind ChatGPT, saw its founding CEO, Sam Altman, get fired and be rehired inside seven days.

If ever there was a governance issue to challenge boards right now, it is AI. Many believe the technology could do great harm, while others claim the anxieties are overblown.

At least one academic, Harvard’s Roberto Tallarita, argues the difficulties are so great that corporate governance will be inadequate to the challenge of ensuring AI does no harm. He believes governments will be forced to intervene with regulation.

We saw the opening salvoes of new rules and regulatory thinking in the UK, EU and US last year, but governments and boards too will likely have to do more as the technology develops. And the experts say it will develop fast.

Boards will have to ensure they have the right skills and are asking the right questions if the consequences of AI are to be benign.